How traders can identify and trade common technical chart patterns using a simple forex trendline tool on automation resulting in a more effective and efficient trading experience.

1. Trading Technical Chart Patterns
With Help Of Forex Trendline Tool

2. In currency trading, the movement of
currency prices creates distinctive formations
that are known as chart patterns.
Common points or lines are connected over a
period of time in order to define a technical
chart pattern.

3. Closing prices, highs, lows, etc. are connected by these
lines of points or what we commonly use know as a
Forex trendline tool available in Metatrader 4 platform.

4. In order to predict an underlying currency
pair's future price movements, these chart
patterns are used in technical analysis in
conjunction with the forex trendline tool.
The tool available is a useful feature that
assist trader in identification of key price
levels and also to mark out elusive chart
patterns that traders may often miss out on.

5. Identifying these chart patterns on the
currency chart for a new starting trader will
take some time. It is definitely going to take
time and experience to understand market
movement and pattern formation.

6. While starting traders may often identified
the patterns too early in their
formations, due to their excitement may as a
result place trade entries too early based on
the lack of pattern confirmation which may
leads to false trading signals.

7. Therefore it is great if there is a customized
forex trendline trading tool that can help in
the execution of trade entries based on
proper trading signals and the monitoring of
the trade process all on automation.

8. Going back to the five most important trading
technical chart patterns in currency trading that
all traders should be familiar with:
• The Wedge
• Head and Shoulders
• Channels
• Descending Triangle
• Double top

9. The Wedge

10. The wedge pattern has two variations. The
wedge pattern actually is a reversal pattern,
which indicates the occurrence of a reversal
of the pattern within the wedge's boundaries.
Thus, the bullish reversal pattern is the falling
wedge and the bearish reversal pattern is the
rising wedge.

11. The lows and highs of the candlesticks are
connected to form the wedge, as a result of
which a pattern is produced.
In the wedge chart pattern, the slope formed
by the upper trend line is sharper than the
falling wedge and the slope formed by the
lower trend is sharper than the rising wedge.

12. Head and Shoulders

13. As the name suggests, this trading technical
chart pattern resembles a head flanked by
shoulders on both sides. When the highs of
the candlesticks are connected by a trend line
forming tow troughs and three peaks, then
the head and shoulders chart pattern is
formed.

14. The head refers to the larger price peak and
the shoulders refer to the smaller price peaks.
The head and shoulders chart pattern is a
bearish pattern. For sellers, a favorable break
in occurs when a small descending triangle
starts appearing.

15. Descending Triangle

16. The descending triangle is a bearish pattern is
formed when lower highs form an upper
trend and the lows form a lower horizontal
trend line, both of which converge with each
other. Eventually, a bearish breakout occurs at
the lower horizontal trend line.

17. Channels

18. Ascending channels, descending channels
and horizontal channels are some of the
variations of channels. Channels are defined
in the same way regardless of which variation
is seen on the chart. Channels are defined as
technical ranges with prices that have traded
in for the time being.

19. When the price range trends upwards
ascending channels occurs, when the range
trends downwards descending channels
occurs and when the range consolidates
sideways a horizontal channel occurs.

20. Double Tops

21. Double tops, is a bearish reversal trading
technical chart pattern by one trough in
between two successive peaks.
The level of the peaks is almost the same. The
trough acts as a temporary support and the
neckline is formed by a horizontal line that is
drawn at this point.

22. Out of all these chart patterns the head and
shoulders and the double tops patterns also have
reverse patterns known as the Reverse Head and
Shoulders, and the Double Bottom patterns.
As mentioned, traders get a signal from these
trading technical chart patterns that it is profitable
for them to buy or sell certain currency pair.
Thus, these were five of the most important
currency trading chart patterns every trader should
be aware of.

23. In addition, all traders should have a look at a
simple method to trade these technical chart
patterns on full automation based on the
traders’ personalized trading plan efficiently
and effectively.