Technical Analysis

Triple Top – Reversal Chart Pattern

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Triple Top Pattern Explained

Triple top pattern, shortly called as TT is a technical analysis chart pattern which is determined at the market tops and can be seen in every financial market, including Forex and the stock market for example. Among the many different chart patterns, the Triple Top (TT) is the best and authentic chart patterns examined in the trade analysis chart. The TT pattern remains distinct from the head and shoulders pattern, apart from those 3 peaks remaining top with the similar price level that works like the double top.
The 1st peak occurring in the triple top patter is made while the rates drop down in the consolidation of the clear market phase. Rates will further accelerate up to a standard of the 1st peak where buyers will stop gaining maximum benefit for pushing the rates by means of resistance. Also the 3rd peak is made in a similar way. This formation is the opposite of the triple bottom pattern.

Main features of the Triple Top

As discussed above, triple top will look like 3 sharp peaks with similar levels in at all the point. Generally, TT arises while the market is on its peak time with an uptrend. The 3 peaks should remain sharp and definite, while the low could look like a rounded valley. This chart pattern remains comprehensive while the rates drop below the least low in the structure pattern. Bulkowski state that, the TT pattern is formulated with multiple variations and suggest the traders to set a well-defined congestion pattern.

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Simple moving averages (SMA) – Definition and features

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The simple moving average is basically the simplest way to calculate a moving average. This is an arithmetic mean in which the sum of the last N prices (P) will be taken and divided by N, where N is the period. In other words is an average where all data prices have the same weight. Remember that the most usual is to calculate this indicator using closing prices and therefore from now on we will refer to the closing prices.

It is one of the most used technical indicators by traders in all markets. Many trading systems use simple moving averages, mainly as a trend indicator.

The simple moving average is usually represented by the acronym SMA.

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The Fibonacci Extensions – Definition and Examples

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The Fibonacci extensions, like Fibonacci retracements, are used to establish support and resistance levels, with the difference that the former are generally used as potential targets for profit taking, while retracements are often used as possible points of entry. For this reason, they are included in many trading systems to determine the best levels to exit the market. They are especially useful when markets are widespread.

This market analysis tools is widely included in modern trading platforms like Metatrader 4 and are used in much the same way as the retracements are used, as we saw in the article on Fibonacci retracements. Even some trading platforms allow to draw extensions and retracements in the same chart.

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Common uses of Bollinger Bands

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The Bollinger Bands is a technical analysis tool developed by John Bollinger in the early 1980s.
 
Bollinger bands consist of three curves drawn in relation to the price. These three curves are the upper band, the lower band and the middle band. The middle band is, as a rule, a simple moving average and therefore provides information on the trend. From the midband the upper and lower bands will be calculated using a standard deviation. The interval between the upper and lower bands gives information on the volatility or market activity. By default, the parameters used are a simple moving average of 20 periods and 2 standard deviations to calculate the upper and lower bands.
(Note: on some platforms and graphical analysis software the midband is not shown).

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The Bollinger Bands

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Bollinger Bands – A Great Trading Tool!

Bollinger Bands were developed by John Bollinger. During the early 1980s, Bollinger Bands were announced as a technical trading tool designed to analyze the market (in the beginning it was developed for the stock market). Bollinger was the first person who first developed the method of using MA or moving averages along with two different trading bands. This sort of method was just like using an envelope to cover both sides of a moving average. Contrary to the normal moving average where percentage calculation is important, Bollinger Bands can add as well as subtract the standard deviation which is present in a calculation. Bollinger Bands can be used to produce a definition for the high and low.  For this reason, it is an indicator that can help the trader in rigorous pattern recognition. It is also a helpful tool when the trader is trying to compare the price action with the information displayed by other indicators to arrive at trading decisions.

The Bollinger Bands is an indicator that surrounds the price action in a price chart using two bands and today it is a standard indicator in most trading graphics packages and platforms. It is calculated from a moving average (a simple moving average) on the closing price which is enveloped by two bands that are obtained from adding and subtracting 2 standard deviations from the mean value. This measure of volatility (standard deviation) is what makes the amplitude of the bands.

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The Fibonacci Retracements in Trading

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In technical analysis, Fibonacci Retracements refers to the possibility that the price of a financial asset, such as currency pairs, back off a considerable percentage of the original movement and find levels of support or resistance at the levels established by the Fibonacci numbers before resuming the original trend. These levels are built by drawing a trend line between the endpoints of the movement in question and applying the vertical distance the key percentages of 23%, 38.2%, 50%, 61.8%, 76.8% and 100% based on Fibonacci numbers.

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Double Bottom Pattern – Definition & Description

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If you are a pro Forex trader, you would certainly know a lot of information on the double bottom chart pattern. In this case, Double Bottom is a high potential chart pattern which is significantly taught in Forex training. Moreover this is one of the best and successful patterns that are being followed by many successful Forex traders. This chart pattern looks very similar like the alphabet ‘W’. Expert Forex traders most usually expect the price to be in down trend making a BOTTOM. It will slightly rally up while it is sold down with the previous bottom. We can say that this figure is the opposite of the Double Top pattern.
Forex traders generally look around for a fair increase when the market hit the resistance. For giving you a better idea in this regards, here is an example for reference: Just consider when the market drops down from $10 to the least of $2 during the 1st bottom, here the $2 buyers explore the market and drive-up the price at least for $5, where the sellers disdain the $5 level and trade the market again to $2. At this point, the price of the 2nd bottom remaining with $2, the buyers find it easier to get at $2 and further escalate the market again to $5. During this point after minor conviction, they will be able to push the market to $5 again.
Generally, the double bottom pattern appears while the price falls down and further bounces up and then falls down for the 2nd time in order to equalize the 1st drop. This is why experts compare this chart with the alphabet W. In most of the cases, the 2nd bounce in the price will usually be lesser compared to the first one. The 2nd chance of buying will get its peak which will be lesser than the 1st one. If the 2nd peak reaches, buying gets its end and now selling starts. This entails the 2nd leg of M pattern.

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Double Top Chart Pattern

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The identification of good and valuable chart patterns will help a trader to make great profits within any financial market including Forex. When it comes to chart patterns, you could find plenty of patterns being discussed and even e-Books describing the successful strategy. Well, not all of them work in reality. Here, you can find a lot of information on the double top reversal pattern that helps you to master your trading business and deserve a lucrative cash flow in the Forex market.

Doble Top Description

The Double Top is a chart pattern of high reliability which is formed in bullish markets and precedes a change in trend from bullish to bearish. Generally, double top will begin with a rise in price and it will gradually exhibit a drop. It will further increase in price within the similar level of the original rise, and make a drop further.

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Candlestick Pattern Abandoned Baby Bullish – Definition and Interpretation

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The candlestick pattern Abandoned Baby Bullish is a trend change formation of high reliability which is generated in bearish markets and indicates that there is a high probability that a change occurs from bearish to bullish trend. This formation can be identified as follows:

  • The current trend in the market should be bearish.
  • A large black candle which is followed by a Doji candle whose maximum occurs below the low of the previous black candle.
  • Between these candlesticks there is a gap whichs is known as “falling window”. During the next period a large white candle above the Doji is formed with an upward gap (rising window). This white candle penetrates deeply and closes within the larger black candlestick.
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