There is a beautiful saying in English that history repeats itself. You must have heard that history repeats itself. Well, today we talk about history. History was taught to you in school time that we learn from what has happened in history because it can happen again and at that time what we should do is we understand breading history. Now if we look here, we are talking about chart patterns. Now you will think that history and chart patterns are different.
Why am I taking the example of both? See patterns, what do patterns mean? That what has happened is making a pattern. When you trade, whether you trade in the stock market or you trade in the commodity market or you trade in the cryptocurrency market or you trade in the forex market, there are buyers and sellers in every market. Now what is here? Here is a game of psychology. You will see that the chart patterns are called chart patterns because they have been made on the chart thousands of times. When the price makes a pattern on the chart, we call them chart patterns.
So when buyers and sellers get a situation, a typical situation, they behave the same, react the same and that makes pattern. That is why it is important for us to learn chart patterns. It is crucial if we want to learn technical analysis. So far you have learned reversal chart patterns and continuation chart patterns. Reversal chart patterns are those that the market trendies going on. Let’s assume that the uptrend is going on and if we see a trend of reversal chart pattern, then the market can fall down from there.
The market was going up earlier, it can fall and continuation means that if the uptrend is going on in the market and if we see a chart pattern in front of us, which is a continuation chart pattern, then it tells that the market will go up from here. Generally, it has been seen, it has happened many times, it has happened millions of times, so it can happen again. So when chart patterns are made on your chart, then they try to tell you something, but now see the patterns want to tell you something, but if you do not know about these patterns, then what they want to tell you, you will not be able to hear.
You will not be able to see what pattern is being made and you can lose the opportunity to earn money and it is possible that you did not see the pattern being made and you took the wrong trade, then you can lose money too. That is why it is important to learn chart patterns. So we know the reversal chart patterns and continuation chart patterns in the previous blogs You have already got training on reversal and continuation and today we will learn neutral patterns. It is very important to learn neutral chart patterns and you are going to learn it now.
So now we will start step by step. Wearer going to give you training on neutral chart patterns. So today you have to understand the first pattern in neutral patterns, which is the ascending triangle. Now why do we call it an ascending triangle? Here if I plot a flat line, a horizontal line and along with-it, I plot an ascending line coming up, then this triangle has become a triangle structure. We will call it an ascending triangle and if I plot a flat line and along with it, if I plot line coming down, then what will happen? This will be the descending triangle.
So now we are learning the ascending triangle. So let’s understand what is ascending. Here what you have to see, you have to see on the chart first that has the price taken a sideways movement. Sideways movement you see of the price. After that, what is important for you to see here is where did the price get resistance. Where are the sellers sitting? See where the sellers are sitting, you will get resistance in that zone. That is, the price will fall from there, so we will call it the resistance zone.
When the price falls, there is a zone where there are buyers, which we call the support zone. So here you will get to know the support. Then the price will go up again, but how far will it go? As far as the sellers are sitting. So where the sellers are sitting, that will be the resistance. So you got the resistance zone twice here, which you can see, they are sitting on the same price, they are sitting on the same price zone. So here you will plot a horizontal line. When you plot horizontal line, then you will get to know the resistance. We do this too.
Now when you look for support, then what do you see? The price did not reach the support level. Before that, the price has already got support. Now this is very important for you to understand that if the price gets support again and the support that was earlier, it has got support above that, that is, it got support at the level of resistance, then the price has gone up a little. Support is up, resistance is there. Now here you will plot a trend line. When you plot a trend line, now what will you see?
That brother, one is my horizontal line here, which is the level of my resistance and you have now connected two points and plotted line, which is your trend line, but it is providing you a support level. So you will see that this price, it may be in the ascending triangle. Now if the price is in the middle of this, this is very important to understand that the ascending triangle is a neutral chart pattern. Till now you have learned the reversal and continuation pattern. What does neutral mean here?
Now we have to see who will win. Either buyers will win or sellers will win. If buyers win, then the price will go up and if sellers win, then the price will fall down. Now how will you know who will win? So here what you have to see is where the breakout is happening. If the breakout is going down, here you see the candle that gives the breakout down, then the price may go down from here and if the breakout is going up, then the price can go up. Both things can happen here, that is why it is a neutral chart pattern.
Now have cleared the concept for you. I will show you on the chart how you will see it. Look here, now what you saw, the price got resistance, then it got support, then you see the price is going up, it is getting support continuously. The price came up again, it got resistance. Now you have got two points of resistance, so the resistance is at the same level, which was our first requirement and the support that is getting, where is the support getting, first one support was below, then one level above support was found, then one level above, then you got to know the multiple zones of support.
So you plotted line here, while plotting the support level together, so you plotted a trend line. Now you plotted a trend line, from here the line you are making, you will see that the prices moving in between it. If yes, it is moving in between, then what is our chart pattern, it is an ascending chart pattern, ascending triangle. Now on the ascending triangle, you saw that the price got resistance again, the support it is getting is on the trend line.
If the trend line is support, then what will we wait for, we will wait for the breakout. Now when we get the breakout, it is found at the bottom. Now when it is found at the bottom, we know that if we have got a breakout here, so now what is important, if you are taking entry, suppose you take entry from this candle, then after taking entry, I tell you that you should wait for confirmation,
that the candle that gave the breakout, the candle that has been made after that candle, did it break low, then the second candle has broken low, so according to me, your entry should be next here, on the next candle and your stop loss will be the same for now, the resistance level here will be the same, because it is possible that after the breakout, the price goes up to retest again.
As I showed you earlier, if you see here, then you see here, so the breakout happened, but after the breakout, the price can bounce back to retest, but where will it do, it has become its resistance, where it gave the breakout, the support after the breakout has become resistance, so here the trend line can go down again from here, so here you can see that the price can bounce back to retest, so what you should do, you can take the stop loss and place the trade here.
Now here you understand this thing, I gave you an example here, so you have to trade according to the breakout, this happened in the ascending triangle when the breakout is at the bottom. Now if we talk about the top, the answers yes, so if you see here that there is support, then there is resistance, then there is support, then again resistance, there can be resistance levels, so itis not required that it will be a point, it is a level, it can be a level of some points, but the price falls down from there, support is obtained again,
so what you did, you saw triangle structure according to the support and resistance level and the price is moving in-between it, we will wait for the breakout, we get the breakout, when our upper line breaks here, so we see that the bulls are winning here, the bulls are winning, very good, if you want to take entry, where will you take entry from, wait for the confirmation, when this candle has a high break, in the next candle, we will take entry from here and what can be our target, our target here, this was our width, we can get this much target here, but I will better suggest you to trade according to 1 is to 2 or 1 is to 3 reward ratio.
Your stop loss here, again, the support zone below us, this will be our stop loss here and you use trailing stop loss, this will increase the probability of earning more money. Now this is an example that when the breakout is upwards, in the same ascending triangle chart pattern, the breakout can also be downwards. I just gave you an example, so you do not forget this. Now let’s learn the descending chart pattern, descending triangle chart pattern. Descending means I told you that support is getting at the same level, but the resistance is changing.
So if the resistance is changing and the supports getting at the same level, then this is the descending triangle chart pattern. Again, thesis a neutral chart pattern, so any side breakout can be found. Now if we look here, we have to see first that the price is moving in a sideways movement, the answer is yes, the sideways movement is going up. After that, it gets resistance. You get to know the level of resistance, then it gets support, but now when it gets resistance, then it is below the level of the previous resistance.
So now if you are getting resistance below a level, again you will wait for the support. You will get to know the support again. So now if you know the support, you know the resistance, then what will you do? For support, you will plot a horizontal line and you will plot a trend line in which you can see that you are getting resistance. So sellers are looking here that the seller is at this resistance level first. Now the sellers ready to sell at one level below, but now who will win because this is a neutral chart pattern.
You have to see where the breakout is happening. Soothe breakout can happen here too, the breakout can happen at the bottom and at the top. So the candle is giving breakout at the top and at the bottom, we will wait and you have to keep in mind that the price can come up to retest and if it falls again, it can again be a good entry.
So this is the concept of the descendant triangle chart pattern. I will show you how it will look on the chart. Now you see here, you see that the price has come in a sideways movement. Here the support was found, after that the price went up a little, again it got support here.
The price went up, but it got resistance here. Sellers are sitting, after that the price is pushed down again. The price is showing sideways movement; resistance is found again. So now you have support and resistance zones. You have plotted horizontal line with support levels and a trend line with resistance levels. Now you are waiting for the breakout. Now see one thing, the breakout happened here in the red candle. Now after the breakout, you wait for confirmation.
Confirmation is shown in the next candle. When the low break happened, the first candle, you entered, very good. Now after entering, I have told you that the price can bounce back again for retest. Here you can see a hammer being made. Now you can see a hammer being made. Price generally, if you see strong candle, then it goes up. But how far will it go up? It will go up to the resistance level. So here your stop loss was also there. After that, again, because after retest, I told you that the price will go down again.
You see a breakout again, but because you had already made a position, you made a position. Maybe for a while you will see your portfolio, your position that brother is negative right now. Money is not coming, but if you have taken it once after the confirmation, then wait. Either the stop loss will hit ore will make a big money. So if the stop loss does not hit, then after that you see that the price is going down. How much can you go down, which is the height of our triangle here.
The difference of the two points is the same. We can get the target here. So when the target meets here, you can take a profit and get out. This is an example. When you do real trade, then your mentality does not change at that time. But what happens when you are learning from technical analysis, then you have to stick to what you have learned.
If I have told you about the risk to reward ratio, if you follow the proper risk to reward ratio, you will follow what you have learned and you will not let your emotions be overpowered. Only then you are going to make money. Otherwise, losses happen. Everyone has it. So what do you have to learn? If there is a loss, then why did it happen? Whatever chart patterns you are seeing, when you see them on the chart, at that time, what you are learning, you trade according to it. You trade according to emotions.
It matters a lot. If someone has done emotional trading and if he has made a loss, then definitely comment on it because people will know that he is not alone. Many people get lost in emotions. Everyone forgets what they have learned. Now it is possible that you are making proper notes, but when you are trading, you will not remember anything. At that time, you will do emotional trading.
So people definitely have a loss in emotional trading, but what you have to do is you have to practice and keep your emotions aside. Now here is another example. What do you see? Again you see the price. What did the price do? It took a sideways movement. It got resistance and support. After getting support, it got resistance again and got support. Support is horizontal line and resistance is trend line. Now wait for the breakout. When there is a breakout, what do you see after the breakout? You saw a big red candle.
Definitely, if you see such a big red candle, some people take entry from the candle that is breaking out. You can take entry even after confirmation. So this is an example of descending triangle chart pattern. So I have given you examples here. I will give you one more example. Look at this example. If you look at this example, then we have understood that the price can go down in the descending triangle, but because it is a neutral pattern, it can go up. So I will show you an example of that.
Here definitely bears win this fight, but the same thing can happen if the price gives breakout upwards. Now this is important. You understood below that if the price breaks the support line, then the price can go down, but if it breaks its resistance, then after the breakout, let’s say this candle gave a breakout, then after the breakout, when will you wait for confirmation that the next candle or the candle that gave the breakout, breaks the high. If it does, then this candle will be your right entry position.
Your stop loss, most people trade with the stop loss below the last candle, but because you have very strong support zone, then your support zone will be the level of your stop loss. Now here one more thing to see is that a very big candle was made, which went down, it tried to give a breakout, but after the breakout, did the confirmation come. That’s why always tell you that after confirmation, you are trading. One more thing, whenever you are trading, you see the breakout, then three things are important at that time. Volume, RSI handmaid.
You can understand RSI, MACD and Volume. So I gave an example of a descending triangle chart pattern that both the sides can have a breakout up and down. So I hope you have understood this concept. Now quickly two more chart patterns are left. They can be understood by two things. One is symmetrical contracting triangle. Now what does contracting mean? Now you have understood symmetrical triangles, but the symmetrical triangle canals be a neutral pattern here.
Now what does neutral mean? You have seen the price that sideways movement is going on. Now the sideways movement is going on. Now there is no descending and ascending here. What are you seeing from both sides? Because it is contracting, resistance was found, support was found, but when the next time resistance was found, it was below the previous resistance. So you simply plot the trend line with two resistance levels and now when you see support, then support also shows you that you see support on the level above the previous support.
So when two trend lines are plotted, then you get structure of a symmetrical triangle. Now what is the specialty of this symmetrical triangle? If there is a sideways movement here and it is contracting, then the breakouts important here. In which direction is it? It is up or down and after that remember that the price can bounce back to retest, but if it goes down again, the support that was there broke it and went down, but now it was resistance for it.
I fit goes down, then a big fall can happen and if the price bounces back again, we saw that it went up and then came down, it will get support here, which was its resistance and the price can go up again from here. Softhis is a symmetrical contracting triangle. Here you are definitely seeing the volume on the breakout and indicators have to be applied that the confirmation of your breakout will be found that it is a strong breakout or it is a fake breakout, you will find out.
So see the example here. The example is very clear here that if we see that the sideways movement is going on and the price is contracting, then if we see that there is a breakout on the top, then if there is a breakout on the top, then the price will go up from here. You can definitely wait for the confirmation. When there is high break, then you can have got that level and take the entry and your target will be the difference of the triangle here. The width we see here, the difference of these points, this is our target from where the breakout has happened.
So the target is clear to you. Similarly, if the breakouts on the downside, then you have to wait for confirmation and take the entry and after that your target will be the same as the points difference we had here. You can get a target from the breakout point. Now here the stop loss is definitely the line above, you can take the resistance line and you can take the line below the support line. The levels of stop loss have been set. So you have understood the symmetrical contracting triangle.
Similarly, you have the expanding triangle. How will you see the expanding triangle? There is one day Celsius. Resistance and then support. Then when it got resistance, it got the resistance that it got earlier, it got it at the upper level and the support got it at one level below. So now what you are understanding here, you plot two trend lines and you see that this can be our expanding symmetrical triangle chart pattern.
What is important here is where the breakout happens, I will tell you that you are understanding that the price got but because here one thing you are understanding that when resistance is getting, when support is getting, its zones are known.
So some people trade in between, people also do scalping. So if you want to understand that, then I will give an example of that. You have understood the breakout that I told you earlier. Now let’s see this example. Here I told you that people never wait for breakout. They know that here the price got resistance, then resistance, here support got it, then support got it.
We have plotted the trend line. We know that thesis an expanding triangle, expanding symmetrical triangle. So when the breakout will happen, it will happen. Before that, if the price reacted, it did not break the resistance. If it did not break the resistance, then we can take entry from this zone and if we take entry, then how far will the price fall? The price will fall to support. So the support level is our target and if you want to take stop loss, then what people will say that the next before this, where there was a strong resistance zone, we can trade with stop loss.
People trade in this way also inside the expanding symmetrical triangle. So there will be a breakout, so what will happen after that, you have definitely understood that. But without waiting for the breakout, you can trade in the middle also because the price will go from support to resistance. And if you look here, if we find the example here, the price may fall again here on support. So if it starts rising from support, then again entry can happen. Because the price will go up to the resistance.
So by entering from here, we can achieve our target there also. So this you have learned again inside the expanding symmetrical triangle. Today you have learned four patterns here. One is your symmetrical expanding triangle chart pattern. Along with this, symmetrical contracting triangle chart pattern, descending triangle chart pattern and ascending triangle chart pattern. It is important to learn these four chart patterns because they are neutral chart patterns.
Now if you have learned sofa, then one thing I would like to congratulate you that you are very serious. You really want to earn money. You really want to understand things deeply because you have learned reversal chart patterns, you have learned continuation chart patterns and today you have learned neutral chart patterns. Tell the truth, what have you learned so far? How did you feel after learning all this? Whatever your feelings are, whatever your emotions are, you will definitely tell in the comments. I will feel very good because this was a free course.
We did not charge anything for this. Definitely people learn all these things by giving money, but I tell you that some people ask why did I give it free. So there is a beautiful reason for this and that is that when I was studying, I was very interested in the stock market from the beginning to learn. So I went to an institute at that time. So I was asked for a fee of around 30,000 for a basic course and I did not have 30,000 at that time.
So my mother said something at that time that there Isa course of 1000-2000 rupees’ month, so do it, but I did not ask for 30,000 from them because knew they would not give. So at that time I felt that I wish I had started learning from then. So today there are a lot of people who I personally know that they cannot afford a lot of money. So definitely if you can do it, then you should go and learn, but at today’s rate, there are so many things on the internet