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(Trading) CHART PATTERNS EXPLAINED | CRYPTO JARGON #28 - YouTube
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welcome to cryptic argon the series
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where I am breaking down the most
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commonly used terminology in reference
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to cryptocurrencies trading and
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blockchain technology in today's episode
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I will look into some of the most common
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chart patterns that we use in technical
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analysis in the previous episode I
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outlined what is support and resistance
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also a breakout and a few of the
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indicators that help forecast them and I
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also mentioned the wedge pattern which
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is one of the patterns signaling a
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bullish or bearish potential so in this
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episode I will add some more patterns
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that we observe that can help us
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forecast possible uptrend or downtrend
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moves on a very basic level chart
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patterns are a way of viewing series of
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price actions it can be over any time
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frame monthly weekly daily or even
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shorter the great thing about chart
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patterns is that they tend to repeat
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themselves over and over again so by
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recognizing these patterns traders gain
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a better picture about the markets and
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use them to identify trend reversals and
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continuations first I will start with
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the pennant this is a pattern created
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when there is a significant movement in
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the price followed by a period of
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consolidation this creates the pennant
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shape due to the converging lines a
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breakout movements then occurs in the
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same direction as the big move these are
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similar to flag patterns and tends to
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last between one and three weeks there
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will be a significant volume at the
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initial price movement followed by a
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weaker volume in the pennant section and
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growth in volume again at the breakout
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ascending triangle this triangle usually
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appears during an upward trend and is
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regarded as a continuation pattern
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sometimes it can be created as a part of
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a reversal at the end of a downtrend
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but most commonly it is continuation and
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at the same time it is signaling a
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bullish scenario the opposite is a
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descending triangle also a continuation
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pattern but this triangle is a bearish
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signal and it's usually created as
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continuation during a downwards trend
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bullish symmetric triangle this
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symmetrical triangle pattern is easy to
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spot thanks to the distinctive shape
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which is developed by the two trend
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lines which converge this pattern occurs
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by drawing trend lines which connect a
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series of peaks and lows the trend lines
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create a barrier and once the price
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breaks through this a very sharp
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movement in price follows the breakout
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signals the start of a Bull Run which
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could be quite a jump with a lot of
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volume and significant price increase
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the flag chart pattern forms through a
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rectangle the rectangle develops from
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two trade lines which form the support
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and resistance until the price breaks
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out the flag will have sloping tread
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lines and the slope should move in the
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opposite direction to the original price
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movement once the price breaks through
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either the support of the resistant
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lines this creates the buy or sell
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signal triple bottom pattern this forms
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over time as the price is moved between
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support and resistance and test the
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support again and again but each time
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the support holds strong which can form
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three distinct and almost equal valleys
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on the charts trendline once the third
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valley has formed an upward trend will
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develop past the point of the peaks
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formed during the person's formation
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when this happens the market is likely
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to be bullish for a while and the triple
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bottom pattern is considered a reversal
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pattern transitioning from a bear to a
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bull market this happens in Reverse too
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with the triple top pattern it forms on
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a market chart when the resistance is
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tested multiple times which forms the
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three distinct and almost equal peaks if
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the third time this resistance does not
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get broken then a downward trend grow
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develop past the point of the previous
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dips indicating a very short-term world
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trend has begun the triple top pattern
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is considered a reversal pattern
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transitioning from a bull market to a
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bear market this can happen also just
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after two
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tests of the resistance which we call a
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double top most likely this would be
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observed over a larger period of time
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such as the weekly timeframe and it's
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the same as the triple top but without
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the third peak so two peaks of almost
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identical shape are formed and after
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that the price goes in a downward trend
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for a while this is because the sellers
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are putting a lot of pressure on the
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market at the price level where the
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peaks are formed and the Bears are
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unable to push that price any higher
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either they're not ready to buy at such
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a price or they're more sellers who sell
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at that price level so there is more
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supply which caters to the demand and
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surpasses it which in return creates a
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devaluation of the price this pattern is
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considered a reversal pattern
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transitioning from a bull market to a
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bear market and it can also happen in
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Reverse which is the double bottom this
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pattern shows how we test the support
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level to see if we can push any lower
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but as we get rejected twice as soon as
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the second Valley has formed an upward
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trend will develop past the point of the
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tops formed during the pattern it is a
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signal that the market is likely to be
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bullish does the double bottom pattern
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is also a reversal pattern transitioning
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from a bear to a bull market next is the
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cap and handle pattern which gets its
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name from the obvious shape resemblance
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on the chart the cap is a curved u-shape
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while the handle slopes slightly
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downwards in general the right hand side
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of the diagram has low trading volume
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and it can last from seven weeks up to
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about sixty five weeks so this is a
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longer term chart analysis and it is not
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used much with the hourly or shorter
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candlesticks but mainly with the daily
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and weekly candlesticks it is a bullish
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indicator showing a trend reversal from
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a long-term bearish to a bullish market
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and lastly very similarly looking is the
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rounding bottom pattern but in this case
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there is no handle - the pattern has the
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name this pattern is sometimes also
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called a saucer bottom and it also
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demonstrates a long term reversal
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showing that the asset is moving from a
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downwards trend towards an upward trend
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it can last from several months to years
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so this concludes today's episode feel
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free to share it with anyone who might
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also links to the other episodes are in
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the description box so make sure that
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you check them out thanks for watching
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and I'll see you in the next one
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enjoying this content go check out
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