What are chart patterns?

In this section we are going to explain you what Chart Patterns are and how you can use it in trading. A chart pattern is a pattern that comes back a lot in charts and what is does is that it signal to traders that the price of a security is likely to move in one direction when the pattern is complete.

There are two types of pattern: reversal and continuation. A reversal pattern tells us that a trend will reverse when a pattern is about to complete. And a continuation pattern indicates that the trend will continue upon the completion of a pattern. Now that we know this trading becomes easier. The three most occurred patterns are the Triangles, Flags and Channels.