PRICE PATTERNS FOR TRADERS FLAGS PENNANTS WEDGES SAUCERS AND ROUDING TOPS KEY REVERSAL DAYS GAPS

IN THIS SESSION, WE WILL TAKE A LOOK AT SOME PRICE CONFIGURATION THAT, FOR THE MOST PART, DEVELOP DURING A TREND THESE FORMATIONS GENERALLY TAKE FAR LESS TIME TO COMPLETE, AND AS A RESULT, ARE ONLY OF VERY SHORT-TERM SIGNIFCANCE

<3 WEEKS TO DEVELOP RECTANGLE FORMATION

VOLUME SHRINKS TO NOTHING BY THE TIME IT'S READY TO BREAK OUT

FLAGS REPRESENT A SHORT-TERM PERIOD OF PROFIT TAKING FLAGS ARE RECOGNIZED BY A RELATIVELY HIGH MASTSHOWN BY THE BLUE ARROW

THE FLAG APPEARS USUALLY HALFWAY OF THE RALLY…

NOTICE THE INCREASE IN VOLUME AS THE FORMATION BREAKS OUT

FLAGS ARE A CONTROLLED PERIOD OF PROFIT TAKING, OR LOSS CONSOLIDATION IN DECLINING MARKETS. HEAVY VOLUME AND/OR LENGTHY FORMATION PERIODS ARE NOT REPRESENTATIVE OF THAT.

PENNANTS ARE JUST LIKE TRIANGLES, WITH 2 CONVERGING LINES MOVING IN DIFFERENT DIRECTIONS : ONE UP AND THE OTHER DOWN. <3 WEEKS TO COMPLETE SO THEY NEVER APPEAR ON WEEKLY OR MONTHLY CHARTS BUT RATHER DAILY CHARTS

VOLUME DECREASES AS THE PENNANT PROGRESSES

WEDGES ARE TRIANGLES AND DO NOT LAST MORE THAN 3 WEEKS NEITHER.

SHRINKING VOLUME AS THE WEDGE PROGRESSES

CONSTRUCTED WITH 2 CONVERGING LINES THAT ARE MOVING IN THE SAME DIRECTION

NICE SMILE !

A KEY REVERSAL DAY OCCURS AFTER A LONG MOVE, LASTING MANY DAYS OR SEVERAL WEEKS THE KEY REVERSAL DAY IS, IN EFFECT A 1-DAY PRICE PATTERN THAT SEPARATES WHAT ARE NORMALLY 2 SHARP PRICE MOVES.

QUITE COMMON IN THE DAILY CHARTS ESPECIALLY IN THE FUTURES MARKET

TRADING RANGE IS BIGGER THAN THE PRECEEDING DAY

IMPORTANT FOR THE NEW TREND TO BE IN THE OPPOSITE DIRECTION OF THE PREVIOUS TRADING RANGE

IT CLOSES IN THE OPPOSITE DIRECTION (i.e down) IT HAS A BIGGER TRADING RANGE (higher high and lower low)

THESE 1-DAY TREND PATTERNS USUALLY HAVE A SHORT TERM EFFECT OF 1 DAY MINIMUM TO 10 DAYS MAXIMUM. EXCELLENT ENTRY AND EXIT POINTS FOR SHORT TERM TRADERS VOLUME DOES NOT ALWAYS EXPAND ON OUTSIDE DAYS, BUT AGAIN, IF IT DOES, IT OFFERS STRONG SUPPORTING EVIDENCE IN A CHANGE IN SENTIMENTS BETWEN BUYERS AND SELLERS

VERY EMOTIONAL BEHAVIOR WHERE INVESTORS ARE WILLING TO PAY A MUCH HIGHER (OR SELL AT MUCH LOWER) PRICES FOR A SECURITY

TRADERS LOVE USING GAPS TO ENTER A POSITION OR USE IT AS A SUPPORT.

GAP DOUBLE BOTTOM ISLAND REVERSAL