Chart patterns are a key tool in technical analysis. They help traders predict price movements and make smart choices. We’ll look at recent trade setups in different markets. We’ll focus on Triangles, Rising Wedges, and Flags.
Each pattern offered a unique chance to trade. From breakout buys to bearish signals, we’ll cover it all. We’ll discuss the setup, execution, pros, and cons of each. This will help both new and experienced traders learn about pattern recognition, timing, and managing trades.
Now, let’s explore the charts and see how these patterns played out in real markets!
DISCLAIMER
Trading is a high risk activity, protect your capital through the use of stop loss, making intelligent use of leverage and not investing more than you are willing to lose. The author of the post declines any responsibility for any losses incurred as a result of decisions made after reading this article. The information contained below is for informational purposes only. CFDs are complex instruments, therefore adequate knowledge is required before making any investment. Thank you for your kind attention!
1. GBPCHF, M30 – Triangle (Buy Signal Break)
Trade Setup
The price was stuck in a symmetrical triangle pattern. This pattern showed the market was unsure, waiting for a big move. The market chose to go up, starting a buy signal.
Key Confirmation Level: Around 1.1300, where the upper boundary of the triangle was broken.
Pros of the Setup:
- The triangle pattern was clear with converging trendlines.
- Before the breakout, the price action got tighter, making the breakout more likely.
- The breakout matched a broader bullish trend, helping the price go up.
Execution of the Trade: The trade worked out well, with a quick and strong bullish breakout. After breaking out, the price kept moving up.
Pros:
- The breakout had strong momentum, showing a bullish trend.
- There were few pullbacks after the breakout, keeping the price action clean.
Cons:
- Entering during consolidation might have led to early positioning before the breakout was confirmed.
Overall Trade Review:
This was a classic triangle breakout setup that worked well. The pattern and the strong breakout made it a good trade.
Rating: 8.5/10
2. GBPCHF, M30 – Rising Wedge (Sell Signal Break)
Trade Setup
The pattern started with a sharp rise followed by a rising wedge. This wedge is a bearish reversal sign, showing weakening momentum as prices make higher highs but with less strength.
Key Confirmation Level: Around 1.1226, where the lower wedge trendline was broken.
Pros of the Setup:
- The rising wedge was clear with converging upward trendlines.
- The price respected the wedge boundaries, confirming the pattern.
- It formed after a strong rise, making a reversal more likely.
Execution of the Trade: The price broke below the lower trendline, confirming the bearish wedge signal. But, the follow-through was moderate with some volatility.
Pros:
- The breakdown was clean, providing a precise entry.
- The price had a decent initial drop.
Cons:
- The momentum after the breakdown was not strong.
- There was consolidation after the breakout, followed by a bullish impulse.
Overall Trade Review:
This was a reliable wedge pattern that gave a good initial move. While the momentum was not very strong, the setup was technically sound.
Rating: 6/10
3. Oil, M30 – Rising Wedge (Sell Signal)
Trade Setup
The setup was a rising wedge after a volatile rise, showing buying pressure was exhausted. This pattern often signals a bearish reversal.
Key Confirmation Level: Around 73.22, marking the lower boundary break.
Pros of the Setup:
- The rising wedge was well-structured with multiple touches on both trendlines.
- It happened after a strong rally, increasing the chance of a reversal.
Execution of the Trade: The price broke below the wedge, confirming the sell signal, followed by a sharp decline.
Pros:
- The breakdown had strong momentum.
- The sell-off was clean, giving a favorable risk-reward.
Cons:
- The initial choppiness within the wedge might have shaken out early positions.
Overall Trade Review:
This was an excellent wedge setup with weak bearish follow-through. The breakdown was weak and the price went sideways.
Rating: 5/10
4. GBPCAD, M30 – Triangle (Sell Signal)
Trade Setup
A descending triangle formed, with a flat support level and lower highs. This pattern shows increasing selling pressure.
Key Confirmation Level: Around 1.7845, the horizontal support break.
Pros of the Setup:
- Well-defined descending triangle.
- Clear horizontal support line provided a clean breakout level.
- Formed within a broader downtrend, aligning with bearish bias.
Execution of the Trade: The breakdown was strong, leading to a sharp decline as selling pressure intensified.
Pros:
- Sharp breakdown offered quick profits.
- Strong momentum after the breakout validated the pattern.
Cons:
- Slight consolidation before the breakdown could have tested traders’ patience.
Overall Trade Review:
A textbook descending triangle breakdown with strong bearish momentum. The breakout was clean, and the price moved swiftly lower.
Rating: 9/10
5. SGDJPY, M30 – Flag (Sell Signal)
Trade Setup
The pattern started with a sharp bearish move (flagpole), followed by a consolidation phase forming an upward-sloping channel (flag). This pattern indicated a bearish continuation.
Key Confirmation Level: Around 113.00, where the lower channel was breached.
Pros of the Setup:
- Classic bear flag with parallel upward-sloping consolidation.
- Strong prior bearish impulse aligned with the pattern.
- Occurred in a broader downtrend, adding confluence.
Execution of the Trade: The breakout was clear, and price continued lower as expected.
Pros:
- Smooth breakdown with decent follow-through.
- Minimal retracement post-breakout.
Cons:
- The initial breakout lacked explosive momentum but gradually developed.
Overall Trade Review:
A solid bearish flag pattern with a steady continuation to the downside. While the breakout lacked initial speed, it progressed as expected.
Rating: 9/10
6. EURTRY, M30 – Flag (Sell Signal)
Trade Setup
The setup began with a sharp bearish impulse (flagpole), followed by an upward correction in a parallel channel. This pattern typically signals a bearish continuation.
Key Confirmation Level: Around 37.00, confirming the breakdown.
Pros of the Setup:
- Clear bear flag structure.
- Strong downward move preceding the flag.
- Pattern respected technical boundaries well.
Execution of the Trade: The breakdown resulted in a swift decline, validating the bearish continuation.
Pros:
- Clean breakout with significant momentum
Cons:
- Potential slippage due to rapid price drop post-breakout.
Overall Trade Review:
A textbook bear flag pattern with an aggressive breakdown, given the steepness of the pattern, it is better to wait for confirmation, perhaps waiting for the price to bounce on solid resistances as it then happened.
Rating: 6.5/10
Final Summary of Trade Reviews:
| Pattern/Asset | Signal | Rating |
|---|---|---|
| GBPCHF – Triangle | Buy | 8.5/10 |
| GBPCHF – Rising Wedge | Sell | 6/10 |
| Oil – Rising Wedge | Sell | 5/10 |
| GBPCAD – Triangle | Sell | 9/10 |
| SGDJPY – Flag | Sell | 9/10 |
| EURTRY – Flag | Sell | 6.5/10 |
These trade setups were of high quality. The wedge and triangle patterns performed well. Success depended on momentum and follow-through.
Confirmation and patience were key in breakout trades. This shows how important they are.
Check charts at tradingview.com