Chart Pattern Recognition

Over the last two lectures, we built up the vocabulary of individual candles and the mechanics of a trend line. This lecture puts both of those skills to work by looking at chart patterns - recognizable shapes that price tends to form as it moves, made up of exactly the swing highs, swing lows, and trend lines we've already covered. Every pattern in this lecture is really just a specific, named arrangement of those same building blocks.

We'll split patterns into two families: continuation patterns, which suggest the existing trend is likely to resume after a pause, and reversal patterns, which suggest the existing trend is running out of road.

Continuation Patterns