Classic chart set ups
Classic chart set ups should never be overlooked. This page shows a range of clearly identifiable chart patterns with a commentary on how such patterns should traditionally be traded. Where applicable we will indicate how our techniques, such as our momentum trading method (using a non-traditional application of the stochastic indicator), can also be applied to a classic chart pattern set up to determine where the pendulum of probability is swinging....in favour of the trader or swinging against the trader.
In fact in this instance, our classic chart set up shown in a recent real time trading example: its the Ascending Triangle Pattern. The stochastic window below the chart shows the stochastic above '80' on the signal line, which we know is a bullish momentum signal. This often indicates the pendulum of probability is not only swinging in favour of a breakout, but that the breakout will be strong and has a higher probability of reaching its upside target as described by classic technical analysis.
Classic Chart Pattern Set Up:
Ascending Triangle Pattern.
Stock Code: ATS
Entry price at breakout: 42 cents.
Pattern price target: 52 cents.
Target reached, 23.5% profit