A mistake that amateur traders make about patterns

JOIN ME LIVE @ Noon PT / 3pm ET ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏  ͏ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ ­ [LIVE TRADING SESSION! REGISTER NOW!]( Hello investor Now, I am going to talk about another important category of technical analysis – reversal patterns. Listen, inexperienced traders make the mistake of thinking that most changes in trend will be a quick one. But it is not true. It often takes a period of time for a trend to transition from the previous one to the next one. In fact, it is common for stocks to trade sideways just to pause or consolidate before resuming the current trend… or reversing to an opposite trend. Therefore, price patterns are useful to study this transition period. There are two categories of price patterns – reversal and continuation. A reversal means that the trend is in the process of reversing, while a continuation indicates that a rally is just taking a breather before resuming again. So, a trader wants to identify either pattern early in the formation of the pattern. For this email, we will talk about the popular reversal pattern called head and shoulder reversal pattern. This is perhaps the best-known (and the most reliable) pattern. Before we go deep into the pattern, let’s see it with a visual example: The original trendline is on the left side of the chart. The stock bounces off the trendline, and it’s only when you see the Head that the price broke the trendline. However, the stock rallied to reach close to the peak at the Left Shoulder (often on a light volume). Since it failed to surpass the peak at the Head, it offers a clue of a new downtrend. And we will see the Neckline (the straight line) which has a slight upward slope at tops. This is a vital line because as soon as the stock moves below the Neckline indicates that it broke the support line and begins a new downtrend. Then, a stock would bounce back to the top of the Neckline (the new resistance line) before resuming its downward trend. Now, it is important for traders to pay attention to volumes when analyzing the head and shoulders pattern. - The Head should see a lighter volume than the Left Shoulder. The biggest key is the volume signal for the Right Shoulder. - Volume should be lighter than the previous two peaks (the Head and the Left Shoulder). - Volume should grow on breaking below the Neckline, become light on a rally to the Neckline, and grow again on its way downward. That is just a PREVIEW of what you’d learn as a TradeAlgo member. Rather than guessing, you could learn dozens of helpful tools to find higher-probability trades like how Wall Street traders would do. Come and join my LIVE webinar for a complete tour inside TradeAlgo and learn what you’d get as a member. The next session begins at 12pm PT / 3pm ET. Click below to register: [JOIN ME LIVE @ Noon PT / 3pm ET]( * We will attempt to trade in a paper-trading account – not with a real portfolio. No returns are guaranteed. No longer want to receive these emails? [Unsubscribe](. Trade Algo 401 Park Ave S New York, NY 10016, NY 10016