Learn Best Price Action Pattern For Trend-Following Trading 📚
In this educational articles, I will teach you the best price action patterns for Trend-Following Trading.
📍Ascending & Descending Triangles
The ascending triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish.
The pattern consist of 2 main elements:
a horizontal neckline based on the equal highs,
a rising trend line based on the higher lows.
❗️The trigger is a bullish breakout of a neckline of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying at least below the level of the last higher low.
🎯Take profit is the next historical resistance.
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📍The descending triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish.
The pattern consist of 2 main elements:
a horizontal neckline based on the equal lows,
a falling trend line based on the lower highs.
❗️The trigger is a bearish breakout of a neckline of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying at least above the level of the last lower high.
🎯Take profit is the next historical support.
📍Bullish & Bearish Wedges
The bullish wedge pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish and the pattern is directed to the downside.
The pattern consist of 2 contracting falling trend lines based on the lower lows and lower highs.
❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying below the low of the pattern.
🎯Take profit is the high of the pattern.
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The bearish wedge pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish and the pattern is directed to the upside.
The pattern consist of 2 contracting rising trend lines based on the higher highs and higher lows.
❗️The trigger is a bearish breakout of a support of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying above the high of the pattern.
🎯Take profit is the low of the pattern.
📍Bullish & Bearish Flags
The bullish flag pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish and the pattern is directed to the downside.
The pattern consist of 2 parallel falling trend lines based on the lower lows and lower highs.
❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying below the low of the pattern.
🎯Take profit is the high of the pattern.
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The bearish flag pattern will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish and the pattern is directed to the upside.
The pattern consist of 2 parallel rising trend lines based on the higher highs and higher lows.
❗️The trigger is a bearish breakout of a support of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying above the high of the pattern.
🎯Take profit is the low of the pattern.
📍Bullish & Bearish Symmetrical Triangles
The bullish symmetrical triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bullish.
The pattern consist of 2 contracting symmetrical trend lines based on the higher lows and lower highs.
❗️The trigger is a bullish breakout of a resistance of the pattern and candle close above.
📈The position is opened on a retest.
🔴Stop loss is lying at least below the last higher low of the pattern.
🎯Take profit is the high of the pattern.
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The bearish symmetrical triangle will be considered to be a trend-following pattern if the impulse leg preceding the formation of the pattern is bearish.
The pattern consist of 2 contracting symmetrical trend lines based on the higher lows and lower highs.
❗️The trigger is a bearish breakout of a support of the pattern and candle close below.
📉The position is opened on a retest.
🔴Stop loss is lying at least above the last lower high of the pattern.
🎯Take profit is the low of the pattern.
The main difficulty related to trading these patterns is their recognition. You should train your eyes to recognize them on a price chart.
Once you learn to do that, I guarantee you that you will make tons of money trading them.