Here is a printable cheat sheet of Bullish Reversal patterns list when it comes to technical analysis. It includes fun images to help you memorize the patterns and identify them easily on your chart.
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Bullish Reversal Patterns List
Bullish Reversal Patterns List
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Bullish reversal chart patterns can help identifying an end to a downtrend. The first pattern in the Bullish Reversal Patterns List above is a Double Bottom chart pattern. When confirmed, indicate that the trend of the market price will reverse from downtrend, into uptrend.
A Double Bottom chart pattern is the mirror image of the Double Top pattern. It looks like the letter “W” or the tushies of twin babies hugging. It happens when the pair is in a strong downtrend, followed by two consecutive valleys that are approximately equal to each other, with a peak in between.
Traders should pay close attention to whether or not the pattern has been confirmed by a subsequent break of resistance (the neckline). After seeing that, along with other points of the IDDA approach to strategy development, we could place a bullish entry order (buy order) above the neckline and enjoy the ride up. Just to be safe, we usually set our limit order a little below the same distance as that between the bottom and the neckline.
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Once you have found a bullish reversal chart pattern, you need to find a back up for confirmation. By applying Ichimoku Kinko Hyo to your chart, you will know a lot of secrets about the market movements right away, especially if you are a visual trader. Even though the Ichimoku Cloud may seem complicated when viewed on the price chart, it is really a straight forward indicator that is very usable.
A lot of times it helps if you zoom in and out of time frames to get a better understanding of the market sentiment. Don’t forget that you should never rely on only one chart pattern when analyzing the markets. You should always make sure that you check in with all points of the Invest Diva Diamond Analysis before making a final trading decision.
