Combining chart patterns in Forex trading can provide a more comprehensive view of market trends and enhance decision-making.
Here’s a step-by-step guide on how to effectively combine different chart patterns:
Identify the Primary Chart Pattern:
Start by identifying a primary chart pattern that reflects the overall market structure. Common patterns include:
- Head and Shoulders (trend reversal)
- Double/Triple Tops and Bottoms (reversal)
- Triangles (continuation or breakout)
- Flags and Pennants (continuation)
For example, if you spot a head and shoulders pattern, it typically signals a potential trend reversal. This will give you an initial idea of whether to anticipate a change in direction or a continuation of the current trend.
Watch this video to learn more.