Scribd
Upload
832 views

Forex Chart Patterns and Trend Formations

The document discusses several forex chart patterns: 1) Diamonds are rare patterns that represent repeated expanding and narrowing price fluctuations that resemble a rhombus shape. They do not reliably predict future price movement. 2) Double bottoms refer to when a currency price declines twice to the same low level but does not break through. If the price breaks out of this range, it usually signals a substantial price move. 3) Double tops are similar but occur at high price points. They form an M-shape and if the price breaks out of the trading range, a substantial price movement often follows.

Uploaded by

hidup4eve
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
832 views

Forex Chart Patterns and Trend Formations

The document discusses several forex chart patterns: 1) Diamonds are rare patterns that represent repeated expanding and narrowing price fluctuations that resemble a rhombus shape. They do not reliably predict future price movement. 2) Double bottoms refer to when a currency price declines twice to the same low level but does not break through. If the price breaks out of this range, it usually signals a substantial price move. 3) Double tops are similar but occur at high price points. They form an M-shape and if the price breaks out of the trading range, a substantial price movement often follows.

Uploaded by

hidup4eve
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

1

FOREX CHART PATTERNS AND TREND FORMATIONS

1. Diamond

These chart patterns are one of the most rare classical trend formations on the price
chart in the forex market, but its forecasting does not increase from it.
The figures "diamond" represent all over again extending, and then a narrowed range of
fluctuations of the prices where the period of expansion of fluctuations approximately
corresponds to the period of their narrowing and as a whole is similar to a rhombus.
On charts of large scale (from one day) it is turned as a rule, and on charst of fine scale
(it is less than day) does not specify the further direction of movement in the forex
market.

2. Double bottom

Double bottom chart formations refer to a lower rate at which the currency had declined
to twice, but failed to penetrate. Generally, the asset will trade within that range, but if a
breakout occurs, it can be expected to be a substantial move.

3. Double top

Double top forex chart patterns refer to a higher rate that the currency has risen to
twice, but failed to exceed. In this formations the asset can generally be expected to
trade within the range in the chart. If a breakout occurs, just as with a double bottom, it
is usually a substantial movement.
If you pay attention, you'll notice that the model of a double top chart pattern resembles
the letter "M".

Point A - maximum as a result of an ascending trend

You might also like