What are Chart Patterns?
Chart Patterns is a group of indicators that automatically search for repeating price patterns on the chart. Chart Patterns help traders build probabilistic forecasts of price movement and determine target levels. Patterns can be divided into 3 types, depending on the direction in which the price is expected to move after they are formed:
- Continuation patterns
- Reversal patterns
- Undefined patterns
Continuation patterns include patterns such as flags and pennants. Reversal patterns are double and triple tops, head and shoulders, wedges. The indefinite ones are triangle and rectangle.
In addition to patterns representing various geometric shapes, there are also patterns based on various theories, such as the Elliott Wave Theory. According to this theory, price movement is cyclical and goes through several stages. Having understood at what stage the price is at the moment, it is possible to build forecasts of its further movement.
You can find all available built-in Chart Patterns in the indicators’ menu in the Technicals section, Patterns group.
When using the indicator, the corresponding patterns will be displayed on the chart if they were found.
You can get more detailed information about our built-in indicators that automatically detect patterns on the chart in the relevant articles.