Quick introduction to forex main chart patterns. When Forex education takes a lot of things to learn until you can master it, there is no other way to do than following the rule. After you learn Forex charts, it is crucial to continue learning variety of chart patterns in the Forex market. This article will discuss a little more about Forex charts and how to use them for your advantage.

3 Main Groups of Forex Chart Patterns that You Should Know

Well, it is not enough for you to just know what Forex charts are commonly used in the Forex market. In addition to the chart types, you need to know the patterns and how to benefit them for trading as well. To help you on achieving your best profit in the Forex market, here are some charts patterns categorized based on the signals they present.

No. 1: Reversal Chart Patterns

When it comes to reversal patterns, these chart formations hint that the current trend is ready to change course. When a reversal chart pattern generates at the time of uptrend, it signals that the trend is going to reverse while the price is considered to go down later on. But, if it happens during a downtrend, it hints that the price will rise soon.

In this case, there are several chart patterns which provide reversal signals. They include double bottom, double top, falling wedge, rising wedge, head and shoulders as well as inverse head and shoulders. To trade this kind of pattern, you can simply set an order beyond the neckline and in the new trend direction. Then, take a target which is almost similar as the formation's height.

No. 2: Continuation Chart Patterns

These chart patterns refer to chart formations which hint that the ongoing trend is going to resume. Commonly, these patterns are also known as consolidation patterns since they show how sellers or buyers take fast break before going further in the same direction as the initial trends.  Similar to reversal chart patterns, there are also several chart patterns on this type.

Some continuation chart patterns that you can find in the Forex market include rectangles, wedges and pennants. Note that wedges are possible to be considered as either continuation or reversal patterns regarding on the trend they form. To trade these typical patterns, set an order below or above the formation. Of course, you need to follow the ongoing trend's direction too.

No. 3: Bilateral Chart Patterns

Compared to the other two above, these chart patterns are quite tricky since these hint that the price is able to move either way. It happens when triangle formations collapse. It has something to do with the possibility of price break either to the downside or topside with triangles. Since there can be two scenarios, you should consider both when playing these chart patterns.

At this point, when you find that an order goes triggered, you can consider cancelling another order. If you don’t do this, you will be a part of the action. But, you should remember that it is possible for you to catch a false break when you place your entry order so close to the bottom or top of the formations. So, be careful!

The Bottom Line 

In brief, there are three chart patterns which you can find in the Forex market. The patterns above are categorized based on the signals given by each of the pattern. Since different pattern will present different signal, it is better for you to be careful on reading each of the pattern before making an order decision. The last, keep learn Forex for a good reason.