#usefulmaterial
Rounded top.
A rounded top is a trend reversal pattern that can be used to determine the end of a trend.
The rounded top looks like an inverted letter ''U'', that is why it is sometimes called ''inverted saucer'' in technical analysis books. This figure signals the reversal of an uptrend and the possible beginning of a downtrend. This means that a rounded top may indicate the possibility of opening a short position.
In the above chart, what the rounded top pattern looks like:
1 Uptrend;
2 Rounded top;
3 Neck line.
For this pattern to form, price must first rise sharply and then move horizontally for some time, forming a rounded top. Eventually, the price falls below the neckline.
How to trade on the figure of rounded top:
You should open trades using this figure at the base of the neck line. As soon as the price breaks through the neckline and the candle closes behind it, you can enter a "Short" trade. Or my team and I recommend to wait for the retest of the broken level. That gives a higher probability of closing the deal on take profit. Stop loss is always placed behind the level.
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#usefulmaterial
A symmetrical triangle is a situation on a chart where the tops of the price are lower and the bottoms are higher. Besides, two sides of the triangle are inclined at the same angle. This figure continues the previous trend. The appearance of a symmetrical triangle on the chart means that the volatility on the market has been decreasing for a certain period of time, so a burst of volatility is bound to happen soon.
Detailed description of the "symmetrical triangle" pattern
-A previous trend is necessary before an isosceles triangle, so that there is something to continue.
-Minimum of 4 touch points: 2 touching the ascending support line and 2 touching the descending resistance line. The more touch points, the more reliable the pattern.
-Trading volume should decrease as the pattern is formed.
-Despite the fact that the symmetrical triangle is a figure of trend continuation, it happens that there is a breakout in the opposite direction of the trend. To be sure of this figure, we recommend waiting for a retest of the upper or lower boundary of the triangle.
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#usefulmaterial
"Harami" - consists of two contrasting in colour candles, with the body of the first candle overlapping the body of the second. It is also often said that this is a "pregnant" pattern. The first candle is the mother, the second candle is the foetus. The model is considered quite rare, so be sure to wait for its confirmation by subsequent candles.
The location of a small candle within the long body of a large candle can also affect the nature of the pattern.
The "harami" will be strong after an upward or downward trend, if the body of a small candle is located closer to the middle of the body of a long candle.
It is important for determining the nature of the pattern to consider the location of the small candle, together with the shadows, within the large body of the first candle. The smaller the body of the second candle and the shorter the shadows, the more significant the pattern becomes.
Usually, the harami pattern is conditionally reversal and indicates the end or slowdown of the trend, but if there is a strong confirmation, it can become a reversal signal.
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