Price patterns are used to identify the price behavior. It explains about the movement of price as well as trend.
Price patterns are used to maximize the profits and minimize the loss by identifying the entry and exit level early as possible.
It tries to give ontime signal. There are various patterns used but my favorites are:
- V pattern, N pattern(Bullish)
- Inverted V pattern, N pattern(Bearish)
These patterns can be easily found on Intraday and EOD charts.
For pattern to occur, the prices should make a new high/low, then there should be a pullback followed by a retest of the high/low.
If the test fails, it is a signal of a correction or maybe a potential trend reversal.
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