The major signal for reversal patterns is a change in the trend direction. Reversal patterns are identified when an asset’s price has been trending in one direction and then begins to show signs of reversing and trending in the opposite direction.
There are several types of reversal patterns, including:
- Head and Shoulders: This pattern typically forms after an uptrend and signals a potential reversal to a downtrend. It consists of three peaks, with the middle peak (the head) being the highest, and the other two peaks (the shoulders) being lower in height.
- Double Top and Double Bottom: These patterns occur when the price reaches a resistance or support level twice before reversing. A double-top pattern is a bearish signal, indicating a potential reversal from an uptrend to a downtrend, while a double-bottom pattern is a bullish signal, indicating a potential reversal from a downtrend to an uptrend.
- Triple Top and Triple Bottom: These patterns are similar to the double top and double bottom patterns, but occur when the price reaches a resistance or support level three times before reversing. A triple-top pattern is a bearish signal, while a triple-bottom pattern is a bullish signal.
- Reversal Candlestick Patterns: These patterns occur when a single candlestick or a group of candlesticks form a specific shape or pattern that signals a potential trend reversal. Examples include the bullish hammer pattern and the bearish engulfing pattern.
You can read this Reversal Candlestick Patterns:
• THE DOJI
• BULLISH ENGULFING
• BEARISH ENGULFING
• HAMMERS
• HANGING MAN
• PIERCING PATTERN
• DARK CLOUD
• HARAMI BULLISH
• HARAMI BEARISH
• MORNING STAR
• EVENING STAR
• KICKER SIGNAL
• SHOOTING STAR
• INVERTED HAMMER
Disclaimer: All comapny chart are used only for learing purpose. There is no buy and sell recommandtion. All Technical analyst are learing purpose only.