TRADING FORMATIOS

A TRADING FORMATIOS (also known as a chart pattern) is a recognizable shape or structure formed by price movements on a chart, which traders use to predict future market behavior. These formations are a key part of technical analysis and often signal potential trend continuations or reversals.

Main Types of Trading Formations:

1. Reversal Patterns
   These suggest that the current trend is likely to reverse:

   • Head and Shoulders (and Inverse)

   • Double Top and Double Bottom

   • Triple Top and Triple Bottom

2. Continuation Patterns

   • Flags and Pennants

   • Triangles (ascending, descending, symmetrical)

   • Rectangles (consolidation ranges)

3. These indicate the trend will likely continue:

4. Bilateral Patterns
   These show indecision, with a breakout possible in either direction:

   • Symmetrical Triangle

   • Wedge patterns

Why They're Useful:

• Help identify entry and exit points

• Provide risk management clues via support/resistance levels

• Assist in spotting breakouts or trend exhaustion

Would you like examples of these formations with diagrams or real market charts?

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