FNCE 2132 Chapter Notes - Chapter 3: Chart Pattern, Double Bottom
12 Oct 2017
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Reversal patterns = double top and bottom, triple top and bottom, and head and shoulders top and bottoms: spotted easily on most charts = warn that trend reversal is taking place. If prices go through = uptrend is resumed. Triple tops and bottoms: essentially same thing but with another peak or trough. Height of the patter(cid:374) deter(cid:373)i(cid:374)es the (cid:373)arket"s pote(cid:374)tial: measure the height of the sideways trading range and project the distance from the breakout point. Help measure potential for market approximately top point where prices exceed the neckline. Signals that = a trend has gone ahead of itself and needs to consolidate for a while. Once the consolidation is completed -> prior trend resumes in the same direction. In an uptrend = triangle is a bullish pattern in a downtrend = triangle is bearish. The longer any price pattern has been forming = the more important it is. Uptrends/downtrends are marked by alternating x and o columns.
