Key Patterns for Trading Analysis

We are not yet done with basic technical analysis. Trend analysis, and support and resistance analysis, is an excellent foundation. However, the next building block to establish stronger trading skills is to understand the key patterns.

Once the underlying market is chosen, it’s time to conduct a pattern analysis. The first choice is the time interval for the charts. The four-hour time interval represents an effective middle ground. One can gain a sense of the big picture, as well as of the near-term changes in sentiment. For those trading intra-day, the 30-minute time frame can be used.

While there are many patterns that are formed by price action, the ones that all traders should know are the triangle, channel, parabolic, and Bollinger Bands. Let’s look at some examples.