Chart Pattern Flashcards Revised June 2016 ©2016 TradeSmart University. All Rights Reserved This page intentionally left blank Page 2 Printer Release The user of these flash cards is hereby granted written consent to print this document for appropriate use. Appropriate use includes: - Personal use - Group study These cards may not be printed for the following uses: - Public distribution - Resale or redistribution - Any use for monetary gain - Re-printed or re-branded to reflect a business other than TradeSmart University - Any other use not expressly consented above under “appropriate uses”. TradeSmart University June 2016 Page 3 How to use these Chart Pattern flashcards These flashcards are intended to be printed front and back, cut, and used to drill your recognition of chart patterns. Feel free to print them at home or take them to a regular printer such as Kinko’s or Sir Speedy and have them printed for you. We recommend a heavier paper, such as card stock, as this will be more sturdy and make your flash cards last longer. Instructions: 1) Print pages 5-12 front and back (the descriptions are inverse to allow for this printing). 2) Visually look at the printing to make sure the correct descriptions are on the back of the correct front images. 3) Use scissors or a paper cutter to cut along the bold black lines 4) Once your cards are cut, use them to drill your knowledge of candlesticks. NOTE: If you use a professional printer, they will have the ability to cut the entire card deck at once, ensuring uniform card sizes. Page 4 Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Intentionally left blank Page 5 V-Bottom • Bullish Reversal Pattern • Sharp Rally follows a sharp decline • Reverses in just 1-2 candles • Terminates a primary trend V-Top • Bearish Reversal Pattern • Sharp declines follows a sharp rally • Reverses in just 1-2 candles • Terminates a primary trend Double Bottom Double Top • Bullish Reversal Pattern • Occurs after long bearish trend • Failure of attempt to make a new low • Confirmed on break up from neck line • Typical time frame is 2-5 weeks on daily chart • Terminates previous primary trend • Bearish Reversal Pattern • Occurs after long bullish trend • Failure of attempt to make a new high • Confirmed on break below neck line • Typical time frame is 2-5 weeks on daily chart • Terminates previous primary trend Triple Bottom Triple Top • Bullish Reversal Pattern • Occurs after long bearish trend • Failure of two attempts to make new lows • Confirmed on break up from neck line • Typical time frame is 3-8 weeks on daily chart • Terminates previous primary trend • Bearish Reversal Pattern • Occurs after long bullish trend • Failure of two attempts to make new highs • Confirmed on the break below neck line • Typical time frame is 3-8 weeks on daily chart • Terminates previous primary trend Inverted Head & Shoulders Head & Shoulders • Bullish Reversal Pattern • Occurs after long bearish trend • Like a triple bottom with the middle valley making a lower low • Confirmed on break up from neck line • Typical time frame is 3-8 weeks on daily chart • Terminates previous primary trend • Bearish Reversal Pattern • Occurs after long bullish trend • Like a triple top with the middle peak making a higher high • Confirmed on break down from neck line • Typical time frame is 3-8 weeks on daily chart • Terminates previous primary trend Intentionally left blank Line/Flat Bottom • Usually functions as Bullish Reversal • Occurs after long bearish trend • Trades in very small range • Can last several weeks • When it breaks up, it confirms bullish reversal and termination of previous trend Page 6 Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Page 7 Symmetrical Triangle • A Broad consolidation pattern • Can break bullish or bearish • Lower highs and higher lows • Typically lasts 2-4 months on a daily chart • Indicates a rebalancing (consolidation) of the prevailing bullish or bearish trend Ascending Triangle Channel • Broad Consolidation pattern • May lead to either a bullish or bearish break • Typically lasts several months on a daily chart (at least 2-3 months) • Indicates a rebalancing (consolidation) of the prevailing bullish or bearish trend Descending Triangle • A Broad consolidation pattern • Can break bullish or bearish with a slight bullish bias • Similar highs and higher lows • Typically lasts 2-4 months on a daily chart • Indicates a rebalancing (consolidation) of the prevailing bullish or bearish trend • A Broad consolidation pattern • Can break bullish or bearish with a slight bearish bias • Lower highs and similar lows • Typically lasts 2-4 months on a daily chart • Indicates a rebalancing (consolidation) of the prevailing bullish or bearish trend Stair Step Inverted Triangle • A continuation pattern • Suggests the trend will continue • More prominent in bullish trends • Volume typically contracts during the pattern and increases on the pattern breakout • Typically lasts between 3-10 trading sessions • A Broad consolidation pattern • Difficult to trade because it lacks a clearly defined break out point • Higher highs and lower lows • Can last many months • Indicates a rebalancing (consolidation) of the prevailing bullish or bearish trend Bearish Pennant • Bearish continuation pattern • Suggests the trend will continue bearish • Volume typically contracts during the pattern and increases on the pattern breakout • Typically lasts between 3-10 trading sessions Bullish Pennant • Bullish continuation pattern • Suggests the trend will continue bullish • Volume typically contracts during the pattern and increases on the pattern breakout • Typically lasts between 3-10 trading sessions Bear Flag Bull Flag • Bearish continuation pattern • Suggests the trend will continue bearish • Volume typically contracts during the pattern and increases on the pattern breakout • Typically lasts between 3-10 trading sessions • Bullish continuation pattern • Suggests the trend will continue bearish • Volume typically contracts during the pattern and increases on the pattern breakout • Typically lasts between 3-10 trading sessions Page 8 Name this Pattern Name this Pattern Name this Pattern Name this Pattern Name this Pattern Intentionally left blank Intentionally left blank Intentionally left blank Intentionally left blank Intentionally left blank Page 9 Rising Wedge Falling Wedge • Medium sized pattern, typically forms over 2-6 weeks on a daily chart • Both lines are rising, though converging on each other • Can occur as a continuation or reversal • Heavily favored to break bearish • Medium sized pattern, typically forms over 2-6 weeks on a daily chart • Both lines are falling, though converging on each other • Can occur as a continuation or reversal • Very heavily favored to break bullish Continuation/Runaway Gap Break Away Gap • Complete gap in price action • Occurs after a trend is already established • Gaps in the direction of the trend to signal a continuation, or runaway of the trend • Can measure the expected move based on the previous range before the gap Intentionally left blank • Complete gap in price action • Occurs after a new bottom or new top has been established • Gaps in the opposite direction of the prevailing trend • Signals start of trend in the opposite direction • Gap should remain “open” Exhaustion Gap • Complete gap in price action • Occurs as a sign of exhaustion late in a trend, and usually signals the end of the trend • Gap will “fill” very quickly after it appears (within a few days or couple of weeks) • Do not trade immediately, wait for additional confirmation of actual reversal Intentionally left blank Intentionally left blank Intentionally left blank Intentionally left blank Page 10
