Ultimate Chart Patterns Trading Course (EXPERT IN 1 HOUR)

0:00 in this free video course I'm going to show you everything you need to know about chart patterns for trading stocks cryptocurrencies Forex or any other Financial Market and my goal is ambitious but I want to make this the best chart patterns course on YouTube I Will Not only teach the basics I will also talk about things that other YouTubers don't share or hide behind pay walls all right so first of all who is this course for this course course is for you if you are either a beginner or if you are a more experienced Trader I have built this course in such a manner that even if you are completely new to trading and chart patterns you will be

0:46 able to follow along step by step but also this course will be long and comprehensive so even if you are a more experienced Trader I'm sure you will learn a lot such as more advanced trading strategies and more Advanced Techniques and as I mentioned in the intro it doesn't matter if you trade stocks Forex crypto or any other Market chart patterns are universal meaning that they appear in all markets and the chart patterns also appears on all time frames so it doesn't matter if you are a day trader if you are scalping or if you are swing trading this course is for all types of trading however some patterns work a little bit better in the short term while some patterns are more suitable for the long term term but

1:32 don't worry we will talk all about that and this course is for you that want to be consistently profitable and in order to be consistently profitable you need to be ready to dedicate time and effort you need to dedicate time like for example watching this course but you also need to dedicate effort so it's not enough to just watch this video you also need to practice what you learn in real market so now what can you expect to learn from this course well first of all you will learn how to identify chart patterns and you will also learn chart pattern classifications every single chart pattern has both a direction and a type and we will talk all about that and why it's so important but here and this

2:19 is very key we will cover both the logic and psychology Behind These chart patterns many videos out there will teach you how to identify chart patterns but it is at least as important to understand the why so for example why does a certain chart pattern lead to the price going up and why does a certain chart pattern lead to the price going down if we can understand the why we can use our chart patterns in a broader context and this is how you really will become a better Trader and during this course we will of course talk about the advantages of chart patterns chart patterns can be amazing but what's very important we also have to talk about the limitations of chart patterns for

3:04 example during this video I will share with you guys some chart patterns that many Traders say work well but they can actually be traps leading to losses especially for beginner Traders so make sure to you know pay extra attention to these patterns so now I want to share some important sort of tips and tricks that you can use during the course to learn and improve much faster and the first tip here is that if you are a beginner I recommend to watch the chapters in order as I already mentioned I have built this course in a stepbystep manner so if you are a beginner I really recommend that you watch the chapters in order and for more advanced Traders perhaps you have been trading for a

3:50 while you have a basic understanding of chart patterns and so on and so on I would actually still recommend that you watch the chapters in order just because the course is in a step-by-step manner but what you can also do if you are a more advanced Traders is to use the timestamps or the video chapters so you can skip over certain parts or perhaps replay certain parts and so on and so on my next tip here is to take notes either if you have a pen and paper available or you can do it digitally on your computer phone or whatever but it has been proving that taking notes will enhance your understanding and improve the retention of what you learn so this is something I definitely recommend and one thing that I personally really like about you know educational videos for

4:35 example when I studied math I pretty much learned everything by watching educational videos on YouTube and one of the main benefits of educational videos is that you can replay parts that are uncertain or unclear until you really get it and the next tip here is to do the exercises so during this course I will give you guys some exercises because in order to become a better Trader you need to not only learn you also of course need to practice so if you want to take trading seriously I recommend doing the exercises it's of course nothing you have to do but I do recommend it and last but not least guys ask questions if anything during this course is unclear make sure to drop a comment down below I will try my very best to answer every single question on this video all right so let's begin here

5:23 by talking about how to classify the chart patterns uh every single chart pattern has both a direction and a type so throughout this course we will give every single chart pattern both a direction and a type so let's take a look at both of these classifications individually the direction specifies how the price will move after the chart pattern has appeared and we have two different directions a chart pattern can be either bullish which indicates that the price will go up after the chart pattern the other direction is bearish and indicates that the price will go down after the chart pattern has appeared not every single bullish chart pattern will lead to the price going up and not every

6:09 single bearish chart pattern will lead to the price going down but if we can learn both how to identify and how to trade these patterns correctly this will be true most of the time the other classification is the type and the type specifies the price Direction after compared to the price Direction before and once again here we have two main types the first one is the reversal and the second type is the continuation and we have two different types of reversals the first reversal is the bullish reversal and for the bullish reversal before the pattern appears we have the price going down then the pattern appear

6:56 so this circle right here is the chart pattern and then after the pattern the price goes up the other type of reversal is the bearish reversal and this is the opposite of the bullish one so before the chart pattern appears we see the price going up the pattern appears and then after the pattern the price is going down but we also have two different types of continuation patterns the first continuation pattern is the bullish continuation and this means that before the pattern appears the price is going up then the chart pattern appears but after the pattern the price will continue to go up that is why it's called continuation pattern and of course the opposite is true for the

7:42 bearish continuation for this one the price goes down before the pattern appears then the pattern appears and after the pattern the price continues to go down but we also have one more type this right here is the type that I call uncertain and these patterns are very important to be able to identify because these patterns will not have a clear Direction and many times they will also not have a clear type so these patterns can be super hard to trade and most of the times these are patterns that I try to avoid and now you may wonder why do I even include uncertain patterns in this course well when it comes to trading it's of course important to be able to

8:28 spot trading opportunities but it's actually also important to be able to spot when not to trade so I would highly highly recommend that you don't skip over the parts where we talk about uncertain patterns so yeah as I just said these are chart patterns that I avoid at all costs so let's put what we learned here together and take a look at some chart pattern classification examples here so remember every chart pattern has a direction and a type so an example of a chart pattern could be for example a bullish reversal pattern so this is where the price goes down we have the pattern and then the price goes up another example could be a bearish continuation pattern this would be the price going down the pattern appears and

9:14 then the price continues to go down yet another example could be a bearish reversal in this case we have the price going up before the pattern then the pattern appears and then the price goes down so now guys we are finally ready to start exploring the chart patterns and for every single chart pattern we will both take a look at how to identify the pattern and how the pattern would look like in a textbook but what we will also do for every single pattern is to take a look at real life examples and strategies so we will both take a look at how to find the pattern but even more importantly we will also take a look at how to trade the pattern all right so I think a great pattern to start off with is the double bottom pattern this right

9:59 here is a bullish reversal pattern which means that the price is going down before the pattern appears and the goal with this pattern is to reverse the price to the upside so to identify the double bottom you first need to identify a downtrend this is when we are printing both lower highs and also lower lows after the move towards the downside what you're looking out for here is two lows which are at around the same level these two lows doesn't have to be on the exact same level but they should be roughly at the same price what we usually do here is that we drag a horizontal line between the two lows and we also want to draw a horizontal line connecting the high here in between the two low points

10:46 this move right here the first move down after the pattern has appeared is also significant so now let's take a look at how do we trade this pattern well first of all you can see that this is a double bottom because we had a move towards the downside we saw one and two lows at the same level and then a reversal towards the upside the most common entry point is to enter on the candle that breaks above the line defined by the high in between these two low points however I actually have another entry point that I personally prefer many times but first take a look at the strategy for entering the breakout so your entry would be where this Candlestick close so at the high of the close right here if you enter at that point the most common

11:33 place to set your stop loss is to set it just below the lowest point of the double bottom and if you don't know the stop- loss is where you will automatically sell if the price goes down to this point as for your Target level what I usually recommend here is to Target a risk to reward ratio of 1 to two or more and what I mean with this is that the distance from your entry point to your target should be more than twice as long as your distance down here to your stop loss which would make your profit Target around here so that is one simple strategy however another strategy that I personally really like is to enter at the candle that just slightly

12:21 dips below the low created by the first bounce what you can then do is that you can enter on the candle close of that move and one thing to notice is that you will not always see the price dip below the line created by this point uh many times the price will reverse just slightly above and then this is not as good of a strategy but when the price Wicks below this line right here I personally like this type of entry for this type of Entry I would also place my stop loss just below the lowest point of that candle and using a risk reward ratio of two perhaps our profit Target would be here so this right here is a much quick strategy our goal here is to get in and out quickly and make some quick profits another potential entry is

13:08 that many times after the price breaks this point right here the price will pull back so another entry point is to enter on that pullback however in this example the price broke this level and never looked back but many times you will see a pullback and that can also be a great entry point I will talk about that entry very soon when we talk about the double top strategy and you may wonder what is the psychology behind the double bottom well it's pretty simple because before the pattern appeared we had a downtrend and when we see a low another low and then when we break this high right here the downtrend is terminated and that is where the buying opportunity comes from so now guys we are ready to take a look at the Double

13:55 top pattern and later when we take a look at the Double top strategy we will look at the entry type I talked about earlier in the course but first let's take a look at how we identify the double top so as always the first thing we want to do is that we want to take a look at the direction and the type so in this case we have a bearish reversal so before the pattern appears we want to see the price going up then this red part right here is the actual pattern and after the pattern we want to see the price going down and compared to the double bottom I made this example a bit more messy and that is because in real markets you will seldom have you know perfect looking patterns most of the times the patterns will look more something like this a little bit more

14:42 messy but the same principle here applies so for the double top the price is pushing higher but then at one point we find two tops here at the around same level indicating that the price is struggling to push higher what we usually do here is to drag a line here in between the two highs and what I want to show you guys with this example is that sometimes the price will push quickly above the high before the reversal and what you also can see here is that in real markets we will sometimes have sort of multiple minor lows in between the highs so it's important that you drag your other horizontal line at the lowest low in between the highs here so now let's take a look at this pattern in action in a

15:29 real market so you can see in this examp example we had the price pushing up we got reacted one time and then we got reacted one time again this was actually almost like a triple top so we almost had three small reactions here and when we talked about the double bottom we already mentioned this type of Entry when you can enter at the resistance we also talked about the entry where you can enter at the break below the line so for this pattern I want to focus on this type of Entry right here and this one can be a little bit tricky to understand especially for beginners but essentially what we're looking out for here is that first of all this strong bearish candle right here broke below the low so this

16:16 right here is a common point to enter but an excellent entry point can actually be to wait for the price to pull back or in other words move against the direction of the breakout move and then enter at the pullback so in this case the entry would be right here and to make this example more clear let me actually show you guys how this would look like in a textbook so in a textbook let's say we have a clear very super clear H double top like this and in a textbook the pattern will usually look like this right you will see the price going up to the exact same point and test the previous support as resistance but you can see that in real markets many times like it did right here it

17:02 actually pushed Above This middle line and this is super common and this is why you should not be too focused on this sort of perfect patterns that you see in textbooks it's fine to see the price pushing Above This middle line but what we want to see in order to confirm the entry is a small move here towards the downside so entry right here you may of course wonder where do we place our stop loss uh well for this type of entry point I think the stop loss is very clear usually you will set the stop above the highest point of the pullback so in other words the uh you want to set the stop loss above this point right here and if you target a 2:1 risk reward ratio uh your target would be somewhere

17:48 around here and for the double top you can also use the strategies we talked about earlier in the course when we talked about the double bottom so now guys the time has come for the bull flag pattern uh the bull flag is one of my my personal favorites I really like this pattern uh both because it happens so often in the market it appears all the time and it's also a relatively simple pattern to identify a good bull flag what you are looking out for is that you want to see a strong impulsive move so the move that goes in the same direction as the trend are called impulsive moves and then we want to identify a pullback and a pullback is essentially a move that goes in the opposite direction of the trend many times the bull flag will

18:33 print sort of minor lower highs and lower lows within the move however bull Flags can also be more simple so for example this move right here could be a bull flag and this move down here could also be a bull flag the difference between a good and a bad bull flag is often more about how the price behaves both during the move towards the upside but also inside the actual flag so let's now take a look at the bull flag strategy and how to trade a bull flag step by step so first of all you can see that the flag we have right here is the one most similar to the sort of textbook bull flag we just recently took a look at because as you can see we had this

19:19 impulsive move up then the price started to move against the direction of the trend and also inside the actual bull flag we printed both lower highs and we also printed lower lows so this is a very classic example of a bull flag and in order to find a good bull flag what you're looking out for is that you want the move that happens before the bull flag so this move right here you want this move to be pretty sharp it's a good sign when we see strong candles like this one and this one happening before the flag during the actual flag what we preferably want to see is that we want to see lots of this candles these candles that are pretty pretty small like these three right here these three

20:06 right here in simple terms we usually want the flag to be pretty tight here and we don't want the price to move too much the most common way to enter the bull flag is to enter on the candle that breaks the flag so you can see that this right here is the candle that broke above the flag and what we usually do is that we enter on that candle close and preferably what you want to see with the candle that breaks above is that you want to see a strong candle just as the candles we talked about down here it's a good sign when we see a long and strong candle as for your stop loss uh you usually place it below the lowest point of the flag and in this case you can actually see that the lowest point is all the way down here in this case we

20:51 had pretty much one low and two lows at the same level so we want to make sure to place the stop a tiny bit below the reason why we do this is because if the price gets reacted at the resistance of the B flag we can actually allow the price to get one more bounce on this support without getting stopped out to keep it simple you can use a risk reward ratio of two and we have been talking about what that is earlier so so your target would be somewhere up here however another method you can use is to measure the impulsive move up and you can take this exact measurement from the lowest point of the bull flag and make this point right here your target another way to enter the bull flag is to

21:37 try to enter at the support of the flag but in order for this entry to work so imagine that this right here is the flag what I usually want to see is that I want to see a candle that looks something like this that quickly dips below the support of the flag and then quickly pushes above if we see a candle like this uh in the bull flag then a good entry point is to actually enter at the candle close of that pattern you might recognize this type of entry from the patterns we talked about earlier in the course and I'm personally a big fan of this type of entry and this type of Entry is often called a false breakout or a failure test what I also want to show you guys with this example is that

22:22 not all bull Flags will look like this not all bull Flags will have highs and lows like we see in the textbooks uh but many times they will be just simple pullbacks so for example if you take a look at the flag down here you can see that it's pretty much a line we have an impuls A Move we have a move against the direction of the trend and here we saw the breakout however now I have a short exercise for you guys I want you guys to think about which of these bull flags are the best and I want you guys to specifically think about the move that happened before the flag appeared so if you want to pause the video right now think a bit and drop your answer down in the comments below hey why aren't you pausing the video just kidding you of course don't

23:09 have to do the exercises here but I do think it's really valuable to sometimes pause the video and think so the answer here at least for me is that this right here is a better bull flag and this is not because the bull flag looks more like it does in the textbook uh the reason I think that this bull flag is better is simply because the move that happened before the flag appeared was much stronger and this is what we want to see if you compare it to the move that happened before this flag you can see that during this upwards Movement we had lots of small candles and we had sort of low momentum and preferably before the flag we want to see strong momentum so now guys let's take a look

23:54 at the bare flag pattern as you can hear on the name the bare flag is a bearish pattern and the tipe type is continuation so before the pattern we have a downtrend and the goal of the pattern is to continue the downtrend for the bare flag the price will be sloping upwards during the flag and we usually Define the flag using two lines like this in textbooks you will usually find the pattern printing higher highs sort of minor higher highs and higher lows within the pattern but as I talked about with the bull flag this part right here in some situations can also act as a flag so a bare flag doesn't really have to print higher highs and higher lows within the flag sometimes it will be more like a

24:39 straight line so let's now take a look at the bearish flag in a real market and the bare flag strategy so first of as you can see here we have a very nice downtrend we are printing lower highs and lower lows and this right here is a great example of a bearish flag but what you can notice about this flag is that in this case with don't really have super clear highs and lows you can see yes we do have some highs and lows within the flag but it's not really the super clear flag you see in textbooks the most clear entry point for the bar flag is to enter here at the breakout or some Traders when we break down we'll call it a breakdown and when you enter the breakdown you want to enter at the candle close however when we see the

25:27 candle close happening near the support level of the flag many Traders will wait for one more candle to confirm the breakout this right here is what we call a confirmation candle so another entry point would be around here the stop loss for the bearish flag is pretty straightforward you want to place the stop loss just above the highest point of the flag and in this case it is this point right here as for the Target level we have two main methods one method is to measure the the impulsive move that happened before the flag you take the exact same length and measure from the highest point of the flag so this will give us a Target level all the way down here but what you can also do is to use

26:14 a risk to reward ratio and in this case if you use a risk reward ratio of 2 to one your target would probably be you know outside the image pretty much all the way down here and now I have another super short exercise for you guys and that is simply can you find a another bearish flag on this chart pause the video and drop a comment below if you want to well one could definitely argue that we have a sort of very small bar flag right here and this was actually a pretty decent bar flag because during the impulsive move down we saw a pretty strong move we also saw a pretty nice breakout candle so this bar flag was not too shabby at all so now it's time for I

26:59 would say one of the most iconic chart patterns and that is the head and shoulders pattern The Head and Shoulders pattern is a bearish reversal pattern so before the pattern we have an uptrend and after the pattern we have a downtrend the pattern itself consists of five important points first of all we have the left shoulder which is this point right here we have the head and we have the right shoulder the other two important points are these two low points that happens between the three high points or we actually have a sixth important Point as well and that is this point right here and later on I will talk about why that point is so important and the reason this is called

27:45 a head and shoulders pattern is because as you can see the pattern kind of looks like the head the highest point in the head and then we have the left shoulder and the right shoulder and the pattern doesn't have to be straight like this it can sometimes slope a bit to to the right right slope a bit to the left but the important Point here is that we have a high then we have a higher high and then we have a lower high what you also want to do for the head and shoulders pattern is that you want to connect the two low points in between the highs so we want to draw a line in between this point and this point and another tip for you guys is that this pattern becomes stronger if this low point right here is actually lower than this low point right

28:32 here and this is from a market structure perspective after watching this course I highly recommend that you guys check out my course on Market structure I will make sure to leave the link to that video up in the corner of this video and the reason for this is that if this point right here is lower compared to the previous low then you can see that we have both lower lows and at the same time we have lower highs so in this this case after this high right here we actually have the beginning of a downtrend because in order to have a downtrend we need to have lower highs and lower lows that is the beginning of a downtrend so having this point a little bit lower than the previous Point makes this pattern a little bit more likely to succeed so now let's take a

29:19 look at the Head and Shoulder strategy and take a look at a real Market example so the first thing we of course need to do is to identify the pattern in this case you can see that we have one high then we have a higher high and then we have a lower high and what you also can see here is that the lows in between the highs are sloping downwards and as I said that makes the pattern stronger as for the entry points we have two main ways to enter the first entry point is this point right here you can see when the price breaks below the downward sloping line by the way this line right here is what we call the neckline if you use this entry point the most common place to set your stop- loss is to set

30:08 it just above the right shoulder of the pattern so you set it just above this point right here and if you're using a 2 to one risk reward your profit Target will would be all the way down here so it is important to notice here that compared to the previous patterns we have been talking about the head and shoulders pattern is a very large pattern so it will take long time time to play out and you will need patience trading Head and Shoulders another way to take targets for this pattern is to measure from the head down to the neckline and then you take this exact measurement and measure from the breakout the benefit using this approach is that your target level can many times be a bit tighter but depending on how

30:53 the pattern look like sometimes uh when we do this kind of measured move the target level will actually be further away way H compared to a two to one risk reward so this will depend on a Case by casee basis another common entry is to wait for the neckline to flip to become resistance and then enter at a reaction from the resistance this entry point is often more suitable for short-term Traders because you you will be able to have a much tighter stop- loss and because you have a tighter stop loss you will be able to have a tighter Target as well so in this particular example you could enter here at the reaction from the resistance so you can see we're looking at this reaction right here we have two candles strongly reacting from

31:40 the resistance using this entry point I would set my stop loss above the highest point of the reaction so as you can see I would set my stop- loss Above This Candlestick Wick right here and because the head and shoulders is such a large pattern what I like to do here is to leave a little bit of Wiggle room sometimes you can actually uh let me change color here you can actually set the stop loss even higher here to allow for the price uh some more room to move here but as you can notice when we have a tighter stop- loss we will also be able to use a tighter Target so using this type of Entry your target level could be could have been somewhere around here if you're using a two to1

32:25 risk reward and as you can and as you can see this would make the pattern play out much faster and now it's time for the opposite of The Head and Shoulder and this is the inverse head and shoulder pattern and this right here is a bullish reversal pattern so if you a Trader that prefer trading patterns that lead to the price going up this pattern uh is more suitable for you and since this is a reversal pattern before the pattern appeared we need to have a downtrend then the pattern and then the price goes up once again the inverse Head and Shoulders consist of five or even six important points depending on how you see it first of all we have this point this is the left shoulder we have

33:11 the head and we have the right shoulder uh these three points are important but we also have the points in between these highs so these two points right here also important and the sixth important point is this point right here this is the first pullback that happens after the pattern appeared and compared to the normal head and shoulders I made this pattern more similar to how you will find the pattern if you look at text textbooks or Google or whatever you can see I made the highs here appearing at the same level and I also made the pull back here going down to that exact level but it is important to remember that this doesn't have to be the case the pattern can look more something like this or even you know perhaps more something like this this right here is

33:57 more of a you know perfect example and when you have been trading for a while you will realize that it's not very common that we see these you know Picture Perfect patterns so here is a very realistic example of the inverse Head and Shoulders as you can see in this case the left shoulder the head here and the right shoulder are at you know a pretty similar level but you can but you can still clearly see that we have one low a lower low and then a higher low and in this case you can also notice that we have one high right here and then a low lower high just as with the normal Head and Shoulders you can buy this pattern on the breakout so when the price breaks above the neckline uh but in this case I actually want to

34:43 focus more on the retest so you can see here we actually had a beautiful retest of the downward sloping neckline and one reason that made this such a good retest was that we saw really strong momentum bullish momentum coming from the test of supports so one way to enter this pattern would be to enter at the candle close of that momentum candle this is a pretty good entry point for multiple reasons first of all we will be able to find a pretty good stop-loss level for this case because first of all we have one low right here the lowest point of the retest but in this particular case you can also see that we found a minor low here before the breakout so because

35:30 of these two lows you may wonder where should we set our stop loss in this case I would actually set my stop loss below both of these points and the logic here is that if the price start to fall after this momentum candle right here we still have two potential levels where the price can bounce before we reach our stop loss and using a 2:1 risk to reward ratio your target might have been up around here but of course guys you can also trade the breakout so you can trade this candle right here but one thing you have to notice about this particular example is that yes the price broke above and this candle started off pretty good but during the candle the bars took

36:15 control and actually close the candle all the way down here and when you enter on breakouts you don't want to see you know the price go up and then quickly dip below because this can many times lead to the price going down and as you can see after this breakout we actually saw the price moving slightly down here and that is why in this case I actually think that the retest entry so this entry right here was the better choice and this is a very important lesson not all chart patterns should be treated equal depending on how the price moves at important price points so for example how the price moves during the breakout we as Traders need to be able to adapt to how the price moves and not blindly

37:01 trade all patterns all right so next up we have the falling wedge pattern and this is actually a special type of pattern why well as you can see this pattern can act both as a reversal but also as a continuation pattern and the direction here is bullish so the pattern can appear after a downtrend and reverse the price to the upside but the pattern can also appear after an uptrend and and continue the price towards the upside to identify the falling wedge what you're looking out for here is that you want to see both lower highs and you also want to see lower lows but the slope here of

37:46 the highs should be steeper compared to the slope here of the lows so the pattern here will get Tighter and Tighter and this is true for both the reversal but also true for the continuation pattern so now let's take a look at the falling wedge strategy and later on in this video I will also show you guys the reversal version uh but for now let's focus on the continuation version so as you can see in this example we had a nice movement towards the upside and then the price started to print both lower Highs but also lower lows but what you can see on this pattern is that the upper line is more steep compared to the lower line and this is exactly what we're looking out for the most common entry for this

38:33 pattern is when the price breaks above the upper line and what we want to see on this entry candle is that we want to see a strong momentum candle and this right here is pretty much a perfect example as you can see the candle where the price broke out is much longer especially the real body so especially the sort of wide part of the candle is much larger compared to the candles here inside the wedge and this is what we want to see so the entry point here the most common one is to enter at the candle close of the breakout so you enter right there the stop- loss is usually set below the lowest part of the wedge or in other words you set it below this part right here you can see the price Wicked a bit below the lower line

39:19 and as for your Target level you have two main methods one of the methods we have talked about before and that is to use the measured move so you measure the pulsy move like we did right here and you take this measurement and you measure from the lowest part of the wedge and using this method your target would be up here but as with most pattern you can also use a risk to reward ratio and our rule of thumb here is to use a risk reward ratio of two so twice as large as the part between the stop- loss and the entry and this would make your target level somewhere up here pretty much outside this example outside the picture but a bit higher compared to the measured move however guys we do

40:06 have another entry as well and as you know from the previous patterns one entry point that I like for most patterns is to enter here at the support so you could also enter on this candle right here but for the falling wedge pattern uh for this pattern specifically I personally actually prefer to enter here on the breakout but some Traders find success entering on the test of the support and what you preferably want to see if you use this type of Entry is once again that you want to see the price sort of just slightly dip below the support and then quickly push above you can see in this example we actually had a specific type of candle this right

40:52 here is a bullish hammer and when you see a bullish Hammer dipping just slightly below support and then pushing above this can be a good entry so for this entry point you you would enter right here at the candle close of the hammer your stop- loss once again it will be the same as the other strategy you set your stop- loss below the hammer uh but one good thing about this entry point is that you enter before the breakout and this can allow you to take quick profits so for example using a risk to reward ratio of two your target level would be right here and as you can see in this example you would have gotten some really quick profits because the first candle after the candle you entered already hit your profit Target

41:38 so now guys let's take a look at the opposite pattern this right here is the rising wedge and for the rising wedge I will also show you the reversal strategy but first let's take a quick look at this pattern once again this is a special pattern because the rising wedge can also act both as a reversal and also act as a continuation so the pattern can appear after an uptrend and reverse the price but it can also appear after a downtrend and continue to price down once again what we're looking out for here is consecutive higher Highs but we're also looking out for higher lows so once again here higher highs and higher lows that said for the rising

42:26 wedge we want the upper line to be less St deep compared to the lower line so we want the pattern to rise here but when it's rising it should get Tighter and Tighter so when once again the lower line is more steep than the upper line and this will make the pattern sort of get Tighter and Tighter and Tighter and when the pattern is very tight that is often where we see the strong breakout so now let's take a look at the rising wedge strategy and here you can actually see that the example I talked about when we talked about the falling wedge is right here so you can see we saw the falling wedge here the price continued up but then after a while we saw a sort

43:12 of massive Rising wedge and what I want to show you guys with this example is that chart patterns as you know they are Universal so they can appear on all types of time frames but chart patterns can also be very different sizes so you can see that this massive Rising wedge right here is much larger than the falling wedge and one principle you can notice here and that you can write down if you are you know taking notes and so on and so on is that continuation patterns are often uh you will notice that they will often be smaller compared to the reversal patterns reversal patterns can in general be you know large patterns if you remember the head and shoulders pattern and the inverse Head and Shoulders these are very large

43:58 patterns but when it comes to continuation patterns they will often be pretty small like the falling wedge and if you remember the flag patterns are also often pretty small patterns but for now let's focus on the rising wedge here so the first thing you can notice is that the price is printing both higher highs and we are also printing higher lows but the range here of the pattern is getting Tighter and Tighter and for the rising wedge the most common entry is also to enter at the breakout so you can see that this strong red candle broke the pattern so our entry point in this case would be to enter at the candle close of this candle right but for this case the stop loss is a little

44:44 bit more tricky one way to place your stop- loss is to place it just above the high here pretty similar to the falling wedge we talked about recently but as you can see in this case we also have a wick you can see we have a wick of all the way up here so some Traders because we have a Weck all the way up here would actually aim to place the stop loss above this point right here and in my opinion none of these stop losses are bad both are actually pretty good and the stop loss you decide to choose here is you know pretty dependent on your own trading style so if you are more of a shortterm Trader you might prefer to choose the first stop- loss because if you choose a tighter stop loss you will

45:31 be able to also choose tighter targets while if you use the larger stop- loss the the positive thing about the larger stop-loss is that it's less likely that you will get stopped out but at the same time if you use the wider stoploss you will need to use a wider Target as well so as you can see here if you use the first stop-loss type perhaps your target would be down here but if you use the other stop loss in order to get a 2 to1 risk reward ratio your Target would have to be lower and when we see large Rising wedges like right here what some Traders will also do is that they will measure the length of the wedge so they take this measurement and then measure from the breakout right so these two lines should be the same length and then they

46:17 use this right here as their target but now guys let's take a look at the symmetrical triangle pattern and this right here is our first red pattern and why do I call this a red pattern well for the symmetrical triangle pattern the direction for the pattern is actually pretty uncertain uh and I also as you can see I wrote type continuation question mark and that is because in most textbooks you will find that the symmetrical triangle pattern will be classified as a continuation so before the pattern appears you will have an uptrend and in most textbooks they will say that this pattern should lead to an uptrend and if you look at charts

47:03 you will be able to find many examples of this being true but you will probably find even more examples when this pattern turns out to just lead to the price going sideways and I will talk more about that very soon but first we just have to know how to identify this pattern so what we're simply looking out for for the symmetrical triangle is that we're looking out for lower highs and we are also looking out for higher lows and the important part here about the symmetrical triangle is that the highs and the lows the slope of these two lines should be pretty much symmetrical so now let's take a look at the symmetrical triangle in action so for this example I show a symmetrical triangle that happened after an uptrend so in textbooks if the symmetrical

47:49 triangle appears after an uptrend it should act as a continuation pattern and continue the price up but what you will find is that so many many times these symmetrical triangles will simply lead to a trading range a trading range is simply when the price is moving sideways here in a pretty random fashion and when you look at symmetrical triangles after the fact it can be easy to think that you know this pattern wasn't looking very strong I would have not taken this trade and so on and so on uh but I want you guys to imagine that the price is right here so the chart the chart to the right right here has not happened yet and let's imagine that you were a Trader that saw this pattern right here so as

48:36 you can see we saw the price beautifully printing lower highs we saw the price beautifully printing higher lows and then after the symmetrical triangle we saw a really nice breakout towards the upside so when you are at this point in the market it can be very tempting to buy but I personally avoid these patterns because so many times s this breakout right here will turn out to not be significant and the breakout will actually be a normal move within a simple trading range so as you can see a trading range is simply when we have a resistance area and we have a support area and the price here moves sideways within this range and what you will notice is when you look at trading

49:23 ranges by the way the price action inside the range tend to be pretty random when you look at trading ranges a very common mistakes especially for beginners is that they try to find patterns uh you know in everything for example some Trader might notice this right here right so this part right here as some sort of triangle H they they might find you know just this part right here as some sort of triangle and perhaps they might find you know another symmetrical triangle right here and so on and so on so these sort of symmetrical triangles can very easily fool especially beginner Traders and that is another reason why I actually think that it's best to avoid these type of patterns and now while we are at it

50:08 let's take a look at yet another red pattern this one is the broadening range pattern and as you can see for this pattern I actually have both the direction uncertain and also the type uncertain so one could actually argue that this one is even worse than the symmetrical triangle or in other words this pattern is super hard to trade but that is actually one big reason why this pattern is so important to identify as a Trader it's important to identify the patterns you want to trade but it's also important to be able to identify patterns you don't want to trade so how do we find the broadening range well what we're looking out for here is that

50:53 we're looking out for higher highs so we want the price to print higher Highs but we also so want the price to print lower lows so we want to see an upward sloping resistance line while at the same time seeing a downward sloping support line and what this pattern basically tell us is that we are seeing increased volatility in very simple terms volatility is how much the price is moving around the average so if we have you know a price that moves something like this moves very close to the average this right here is low volatility but if we have a price that moves you know a lot around the average this right here is high volatility and

51:40 what the broadening range basically tells us about the price is that the volatility is increasing so here we have a real life example of the broadening range as you can see we have both we have highs here and we are printing consecutive higher highs while at the same time we're printing consecutive lower lows so what this basically means is that the volatility is increasing during this time period but just as with the symmetrical triangle these broadening ranges will often turn out to just lead to the price going sideways in pretty much a range fashion so as you can see this broadening range turned out to pretty much be you know a sort of trading range where we have a support

52:27 and resistance and the price going sideways so my general recommendation here is to avoid these patterns uh but if you want a trading strategy one thing you can try to do but once again I actually don't recommend doing this is to try to find movements quickly above the resistance or quickly below the support and then try to enter at the failed breakout so for example here is an example the price tried to push above the resistance we failed here so one possible entry is to try to enter here at the reaction of the resistance placing your stop- loss above the resistance and then using a risk reward ratio such as two so your trade could have looked something like this but

53:13 these type of Trades are super hard especially when you are actually in the LI markets when you look at past examples you will always be able to find many good trades but when you are in the Heat of the Moment it will be much harder so now guys let's take a look at the cup and handle pattern this pattern is typically a bullish continuation pattern but in some cases it can also act as a reversal and as you guys can see this right here is a very large pattern it's probably the largest H continuation pattern out there and this one is more for advanced Traders because it can be quite hard to spot but what we're essentially looking out for here is that before the pattern appears we we

53:59 want to see a trend towards the upside after this the price starts to print both lower highs and lower lows so we are sort of starting to see the beginning here of a downtrend but after a while we start to see higher lows and within the cup and handle pattern we often see another pattern and this is actually a reversal pattern if you want to as an exercise drop down in the comments below what type of pattern we have right here pause the video right now if you want to well this pattern right here within the cup and handle is actually a head and shoulders and this as you know is a reversal pattern So within this large cup and handle pattern we will often have a sort of small

54:46 reversal pattern within the pattern itself so this is a little bit complicated but essentially what we're looking at for here is that we're looking out for we see the beginning of a downtrend but then the price start to reverse verse and what we want to see here is a sort of U shape so the price goes like this in a u shape and then we see a pullback like this after this pullback the goal of the pattern is to continue the price towards the upside and what we want to do here is that we want to connect the highest point of the first move up and we want to drag a horizontal line like this and the reason this is called a cup and handle pattern is because because this right here the U shape pretty much looks like a cup and

55:34 then the pullback right here pretty much looks like a handle so this is where the cup and handle name comes from and as I said after the handle the price breaks higher so now let's take a look at the cup and handle strategy and when you look at this market right here you can hopefully see that In the Heat of the Moment these patterns can be very hard to spot but what we see here we see all the things we need for a couple cup and handle uh before the pattern appears we saw a strong move towards the upside we can even notice here that we saw a gap you can see we saw a massive Gap in between this point and this point a gap is when the price is trading up when the market is closed so this is something you can see for example in the stock

56:20 market when you have trading hours and you have hours where the stock market is closed such as weekends or overnight so these kind of gaps like we see right here can be created for example during the during the weekend but as you can see we had this move up here and then we saw a lower low lower low higher low higher low higher low so you can see that we sort of have the U shape we talked about recently and if you pay really close attention here uh as we talked about we can often sort of find minor Head and Shoulders looking patterns within this pattern so this is far from perfect and this is not a valid Head and Shoulders because remember an inverse Head and Shoulder should come after a downtrend but what you can notice here is that we can pretty much see an inverse Head and Shoulders here

57:06 because we have a low lower low higher low we can drag a sort of neckline like this and hopefully you can see how this is similar to an inverse head and shoulders in this example the handle of the pattern is this move right here so it was a smaller handle compared to most textbooks but the price eventually broke above and continued towards the upside so there are multiple ways to enter the cup and handle um the first entry point is to enter the break of the horizontal line so to enter at this breakout candle right here so in this case your entry would be at the candle close of the breakout candle as for your stop- loss you usually want to place it below the low of the handle so this right here is

57:53 the low of the handle and using a risk to reward ratio of two your target would maybe be up here another possible entry point is to enter at the retest of the resistance so here we have resistance we tapped one time we saw resistance once again the price broke above and then we tested previous resistance as support and here you don't want to enter blindly at the support what you want to see is that you want to see a reaction and preferably a strong reaction so the entry on the retest here would be after this strong candle right here one good thing about this entry is that you can have a pretty tight stop- loss because you can place the stop loss below the lowest point of the retest so you can set the stop loss

58:40 right around there and set as you know setting a tight stop loss can allow for a tighter reward so you could set your reward around here using a risk reward ratio of two another potential entry is to enter at the handle itself so enter at this pullback right here uh and for this handle we actually have two entries so we we have so many different entry strategies for the cup and cup and handle so you can either enter the breakout right here or you can try to enter the support of the handle so for example enter right here in this case because the handle was so small and not very clear this is an entry I would personally avoid but if you have let me show you guys if we have a more clear handle so if we have a handle that maybe

59:26 looks something like this uh it's possible to get more clear entry points from the from the handle and a good thing about this type of Entry is that we of course we enter at lower prices and we can also get some pretty clear stop-loss levels and Target levels from that uh entry and as with many chart patterns another way to take targets is to measure the pattern so we measure from the low up to the point then we take this measurement measure from the breakout and this is another thing you can use to determine your target level for the cup and handle and now guys let's also take a look at the reverse cup and handle here real quick this one is the bearish version of the cup cup and handle so the direction is bearish and the type is most often

1:00:13 continuations sometimes it can also act as a reversal and in my opinion the reverse cup and handle can often be even harder to spot than the normal cup cup and handle so this one needs a little bit of practice but this pattern is basically the same with the opposite as the normal cup and handle so what we're looking out for is this U shape so we're looking out for a u shape right here then we're looking out for the handle here and the goal of the pattern is to continue the price towards the downside what we also do for the inverse cup and handle is that we drag a line here between the lowest point of the first move down and between the highest point of the U shape so here is a real life

1:00:58 example Le of the reverse cup and handle and here I actually shows an example where we have a much larger handle so remember from the normal cup and handle we had a very very tiny handle but in this case you can see that the handle itself was a very large pattern and if you look really closely at this pattern you will notice that this is another chart pattern if you guys want to let me know down in the comments what type of pattern we are seeing as the handle right here so pause the video right now and answer answer the question if you want to but let's take a look here so as you can see in this case we had a very nice U shape so the cup part of the handle was very very clean in this case and then during the handle itself we printed higher Highs but we also printed

1:01:45 higher lows but what we can notice here is that the range is getting Tighter and Tighter so this right here is a rising wedge which in itself is a bearish continuation pattern meaning that the goal of the handle itself is to continue the price down so in this case we can enter the reverse cup and handle as a rising wedge so we can enter here as the price is breaking the rising wedge so the entry is at the candle close of the breakout candle since we do have a high just slightly above the previous high right here you can see this black line I would actually Place H for this case I would place the stop loss just above this point and using a 2 to1 Target our

1:02:31 Target level would be right around here another strategy is of course to enter the break below support so we have support right here and right here and our Buy Signal would be at the CLE close of this breakdown for this entry you could set your stop loss uh just as we did with the other entry strategy so all the way up here however the downside with this type of stop- loss is that your target level has to be so far down uh so what what you can try to do here is to place your stop loss somewhere above the broken support right if you want a much tighter stop- loss however since the price was moving down in a straight line here we don't really have any clear highs where we can place our stop loss Above So for this breakout right here the stop- loss placement

1:03:18 would actually be very tricky you could try to place it somewhere around here but this is far from a perfect stop in my opinion however the upside with this type of uh stop placement is that your target can also be relatively tight so now it's time for the ascending triangle pattern and in my opinion this right here is one of the best chart patterns out there this pattern is a bullish continuation pattern so before the pattern appears we need to see an uptrend and after the pattern we see the price continue towards the upside the most important part about the ascending triangle is that during the pattern we need to print con consecutive higher lows and this is very important and what we also want to see here is that we want

1:04:04 to see the highs of the pattern to be around the same level these highs doesn't have to be exactly at the same level but they should be around the same level and what we do here is that we draw an upward SL sloping line connecting the lows and we draw a horizontal line connecting the highs the first pullback after the break of the resistance is also an important point and I will talk about that very soon so now let's take a look at the ascending triangle strategy here we have a great real life example of an ascending triangle you can see that before the triangle appears here we have an uptrend then we saw the price clearly printing consecutive higher lows and we also saw

1:04:49 highs here coming in at pretty much the exact same level the most common entry point here is to enter at the break above resistance and as with pretty much all breakout entries what we're looking out for is that the candle that breaks out we want to be strong we want the real body of the candle to be larger compared to the real bodies of the candle inside the triangle so we buy at the candle close of the breakout candle the stoploss here is pretty straightforward we want to set the stop just below the most recent low inside the triangle so we want to set the stop loss just below that line here we can once again use a risk to reward ratio of 1 to two so our Target would be right

1:05:36 around here with that said not all breakouts will be perfect like this example you can see right here the price broke above and it never looked back but many times you will see that we will have a breakout and then after a while the price will be pulling back so another way to enter the ascending triangle is to enter at the pullback after the breakout and here you can either enter at the break of the pullback so you can enter at the breakout or you can enter at the support of the pullback following the break of the triangle next up we have the descending triangle this right here is a bearish continuation so before the pattern we have a downtrend the goal of the pattern is to continue the price

1:06:21 towards the downside and for the same reason that I love the ascending triangle the descending triangle is in my opinion one of the best but as you can see for this example what I want to show you guys is that the most important thing is that in order to identify this pattern we need to see lower Highs but as you can see in this case I on purpose made the lows here you know not at the exact same level but we want the lows to be at around the same level so some lows can go dip a little bit below support some lows can be a little bit higher but what should be really clear when you identify these patterns is that the the triangle should clearly be sloping down so here we have a real example of a descending triangle you can see the

1:07:08 price goes down before the pattern appears and then we can clearly identify lower highs and we can also identify

…