Though traders in the market use many types of pattern, there are some common patterns which are very popular and are widely used by traders all around the world. We are going to discuss some of the popular patterns in the world of forex in our article. You do not need to follow these patterns in your trading style if you are using any other type of patterns. These patterns are only popular because traders find it easy to read the market using these patterns. If any other patterns work for you, it is fine and you do not need to change that. If you do some online reach then you will notice that even the expert traders in the United Kingdom trade with highly reliable patterns. Most of the famous brokers like Saxo have their online learning center and you can also learn many different kinds of chart patterns by accessing their resources.
Patterns in forex trading are very much important. The professional traders use different kinds of chart patterns to trade the reversal and continuation of an existing trend. The professional price action traders use the Japanese candlestick pattern to find high-quality trade setups at the key support and resistance level. To be honest, if you can learn the highly reliable forex pattern then you can easily execute high-quality trades with proper money management.
This pattern does not get its name because it has been patented by the Head and Shoulders shampoo. It has been named because the formation of this pattern resembles the head and shoulder like figure in a chart. It is a very popular and widely used pattern by all over the Forex traders in the world. Even the professional traders also love this Head and Shoulders pattern. This pattern is clean, easy to understand and signals the traders when to enter the market to make a profit. Most of the time this pattern is found at the end of the bullish trend and the professional traders executed their short orders with the break of the neckline.
Candlestick charts are very popular among the traders for their simplicity and for easy interpretation in trading CFDs. Though there are many patterns in a candlestick chart, engulfing pattern is the most used patterns in candlestick. These patterns are a very good signal that can tell the traders when the market trend will go to the opposite direction. If you can know when the trend will be over and it will have a new direction, you can place a trade on the market for more money. These patterns refer to an opposite direction in the market. But when you look for the engulfing pattern make sure that you using the higher time frame. The novice traders often try to trade this pattern in the lower time frame but ultimately loses a huge amount of money.
This pattern is also another pattern which is used by many traders. It is very popular especially with the short time frame traders in the market. Triangles in a trading chart if formed when the prices are going down into a narrower area. Though there are many different kinds of triangle pattern most of the time the professional traders prefer the symmetric pattern. When you place you trade by using this pattern, remember one thing that almost 90 percent of the time the breakout of this pattern occurs in favor of the last prevailing trend.
Conclusion: These are some of the widely used and very popular patterns in Forex charts which are used by traders all over the world in this market of exchanging foreign currencies. If you use any other pattern, it is also good if you can make money with that patterns.