Forex Trading Patterns

This is the branch of technical analysis that focuses on finding price (and often volume) patterns. Trading using price action can help you to identify shifts between rising and falling trends. Traders look for price patterns that signal changes in the market’s trend, and then execute trades based on these signals. Trading patterns can also be used to forecast market reversals and trend continuations.

The ABCD Pattern

While the idea of trading patterns may seem strange, it’s based on carefully tested methods which underline their usefulness to traders. Importantly, patterns are factors to consider when calculating where to enter, set stop-loss orders, and where to set your profit targets.

Beginner’s Guide for Trading USDJPY

  • Recognise how price movements can develop into price patterns
  • Manage risk with stop losses and set profit targets

While this may not inspire confidence at the outset, these are formations that arise and track the changes in support and resistance. There are also more complex trading patterns such as head and shoulders, cup and handle and double tops/bottoms.

Trading Guides: Identifying Chart Patterns in Forex Trading

Rectangles and, in particular, triangles, have a wide number of varieties that can be used. In essence, all price patterns are looking at the interaction of supply and demand over time and establishing sensible ways in which to react when these trading patterns form. This means you will know how you to react in terms of risk management and closing out.

Ascending forex signals triangleCandlestick Trading

The Heart of Forex


Forex Trading PatternsThis shows a surge in demand for the instrument (surge in supply if it’s a short trade) which adds a great deal of price confirmation for the trader.

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Forex Trading Patterns