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Chart pattern

Chart pattern is a technical analysis term that represents a variety of different patterns that were found to repeat or indicate a certain behavior of the price rates chart. The chart pattern is found occasionally in assets’ charts and can be used by traders to better understand the asset’s condition and predict the future price swings that may occur. The chart patterns were identified with statistical analysis of charts’ behavior and are not always accurate. Usually the patterns are used to support or refute a certain assumption.

Some of the more popular chart patterns include the head and shoulders pattern, trendline, and hanging man.

There are skeptics that claim the patterns cannot be used to predict the future behavior of the chart and if it was and enough traders would use it the pattern would have been ineffective. In spite of these claims, there are many computer based trading robots (algotrading) that use such pattern recognition methodologies as part of the analysis and perform much better than most traders do.

Chart pattern



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