Trading Chart Patterns That Predict Market Psychology
Most traders chase patterns. The best traders read the story behind them. Here’s how to go beyond the surface and truly understand what chart patterns reveal 👇 1/ Patterns Reflect Trader Behavior, Not Just Shapes A head & shoulders or double top isn't just a formation—it's a narrative of buyer exhaustion and seller dominance. Recognizing this helps in anticipating market moves. 2/ Context is Crucial A bullish flag in a strong uptrend? High probability. The same pattern in a choppy market? Proceed with caution. Always assess the broader market context. 3/ Volume Validates the Pattern A breakout accompanied by significant volume indicates conviction. Without volume, be wary of potential fake outs. 4/ Combine Patterns with Key Levels Patterns near significant support or resistance levels are more reliable. They offer better risk-reward setups. 5/ Patterns are Clues, Not Certainties No pattern guarantees a specific outcome. Use them as tools to gauge probabiliti...