Chapter 15. Bar Chart Patterns

Chapter Objectives

By the end of this chapter, you should be familiar with

• Controversy over whether patterns exist

• The influence that computer technology has had on the study of patterns

• The formation of classic bar chart patterns such as triangles, flags, pennants, double tops, and head-and-shoulders

• Historical performance measures of major bar chart patterns

Chapter Summary

What Is a Pattern?

A pattern, or formation, is a configuration of price action that is bounded, above and below, by a line or curve. All patterns have an entry that describes the trend preceding the formation and an exit, which is often a signal for action.

Do Patterns Exist?

Technical analysts believe that patterns exist. However, ...

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