Chart Pattern: Triangles
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Reading a Chart Pattern
Now that we’ve seen some of the indicators it’s time to move to the next area, patterns. Chart patterns are funny things; the human eye and mind are able to make patterns out of anything, even when they aren’t really there.
If you don’t believe us, just take a look at the night sky. Every constellation you see is a pattern that was imposed by the human eye and mind. They aren’t really there; they only exist because we can’t tell the difference between stars at different distances, so we impose patterns to make sense of things.
The good thing about this ability is that if we’re so good at seeing patterns even if they’re only an artifact of how we’re looking at things, consider how good we are at seeing patterns that do exist. That’s one reason why we use charting software, to take advantage of our ability to gather information in the form of patterns. Computers work with raw data, and they do it very well. They generate the patterns better than we do, but they can’t see them.
Before we start looking for the patterns, let’s take some time and go over the kinds of patterns that we’ll be looking for. One thing you should always remember when dealing with patterns is that they tend to appear when there’s a strong resistance and they respond just like a boiler with a stuck relief valve. The greater the pressure that’s needed to overcome the resistance (or support as the case may be), the further it’s likely to move when it does break through.