Technical analysts and traders believe that certain chart patterns and shapes are signals for profitable trading opportunities. Many professional and amateur traders claim that they consistently make trading profits by following those signals. In this chapter we introduce some types of chart patterns and the corresponding trading strategies, that, according to our extensive historical tests, give the trader an advantage.

Triangle Breakout

Figure 18. Triangle Breakout.

This is the famous Triangle Breakout pattern, a strong buy signal. In the past two months the price shown has consolidated with declining amplitude and volume. At present, it breaks out with high volume, signaling a possible new up trend.

Figure 19. A typical Triangle Breakdown pattern –a strong sell signal.

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