Forex market price patterns are based on shapes. These shapes are very valuable and can be used to trade profitably. These shapes are formed by price action depending on market forces. These price patterns have been proven to be useful for traders in the past.
The problem lies in identifying the patterns in the market. Forex markets tend to move in a random fashion, so it is difficult to identify patterns, especially for newbies. The Price Patterns indicator is here to help.
The indicator can be used to trade any currency pair. The indicator can be used on any time frame but it is best to use it for a longer period of time. Patterns that are formed on 4-hour, daily, or weekly time frames are more powerful.
How to use the Price Patterns indicator
The Price Pattern indicator scans price charts and identifies price patterns. It labels and shades patterns, making them easier to identify. A price pattern that indicates a possible trend reversal towards the upside is a good signal to buy.
For example, a triple bottom should form around the support zone. This is a signal that you should buy. A triangle pattern in an upward trend is also a sign of trend continuation. Therefore, you should be ready to buy and add positions. The head and shoulder price pattern, on the other hand, indicates that there is a possibility of a trend reversal to a bearish market. It is therefore a sell signal.
Example of trading
The chart below shows the price movements of the US dollar and the Japanese Yen. As shown in the shaded area, the chart shows a rising wedge. A wedge pattern signals a trend continuation. The wedge pattern actually led to a significant increase in the price.
Similar to the head-and-shoulder market pattern shown by the shaded light coral, it also forms a triangle. A head-and-shoulder pattern signals potential market reversals to a bearish market. The bears will push the price down, so you need to be prepared to place a buy order. Your stop loss should be placed above the head (the highest peak).
The Price Patterns indicator can be a powerful tool for price action traders. It’s easy to use and saves time. It does not require you to memorize all price patterns. The indicators will identify the patterns automatically. You can simply place trades based on the signal. It is a good idea to include it in your trading strategy