1. Investment InsightsInvestment Insights Chart Patterns StockStream LLP

2. All about investments. StockStream LLP Disclaimer Trading carries significant risk of losses and may not be suitable for all investors. Traders should assess these risks either themselves or in consultation with a financial advisor before investing. There is no guarantee that the trading techniques, methods and other information in this presentation will result in profits. The content in this presentation in only intended for educational and informational purposes and not intended as trading recommendation. The content of this presentation is subject to change without notice. Stockstream Financial Advisory Services LLP or mystockstream.com will not take any liability or accountability of losses arising from the use of information in this presentation in any manner. 3. - 3 - All about investments. StockStream LLP StockStream Education Model 4. - 4 - All about investments. StockStream LLP Introduction Chart patterns are formations that indicate either a reversal or continuation of a trend. These can be used independently or in combination with other technical indicators to develop trading strategies. Some of the common chart patterns are, o Head and Shoulder o Double Tops and Bottoms o Triangles, Wedges o Flags, Pennants o Rounded Tops and Bottoms 5. - 5 - All about investments. StockStream LLP Head and Shoulder One of the most reliable reversal patterns. It is formed at the top of a trend. The price forms a left shoulder followed by a head and right shoulder. Each time the price bounces from the neckline. Trading strategy, o Sell on break and close below the neckline on high volumes. o Stop = Average True Range (ATR) of the pair above the neckline. o Target = downside projection of the distance between the neckline and the head 6. - 6 - All about investments. StockStream LLP Inverted Head and Shoulder It is similar to the Head and Shoulder pattern but formed at the bottom of a trend. The price forms a left shoulder followed by a head and right shoulder. Each time the price fails at the neckline. Trading strategy, o Buy on break and close above the neckline on high volumes. o Stop = Average True Range (ATR) of the pair below the neckline. o Target = upside projection of the distance between the neckline and the head 7. - 7 - All about investments. StockStream LLP Double Top Reversal pattern formed at the top of the trend. Price forms two tops at the same level and then breaks below the neckline. Trading strategy, o Sell on break and close below the neckline on high volumes. o Stop = Average True Range (ATR) of the pair above the neckline. o Target = downside projection of the distance between the neckline and the double top 8. - 8 - All about investments. StockStream LLP Double Bottom Reversal pattern formed at the bottom of the trend. Price forms two bottoms at the same level and then breaks above the neckline. Trading strategy, o Buy on break and close above the neckline on high volumes. o Stop = Average True Range (ATR) of the pair below the neckline. o Target = upward projection of the distance between the neckline and the double bottom 9. - 9 - All about investments. StockStream LLP Triple Top This is a reversal pattern formed at the top of a trend. Price bounces twice from the neckline and fails three times at the top. Trading strategy, o Buy on break and close below the neckline on high volumes. o Stop = Average True Range (ATR) of the pair above the neckline. o Target = downward projection of the distance between the neckline and the triple top 10. - 10 - All about investments. StockStream LLP Triple Bottom This is a reversal pattern formed at the Bottom of a trend. Price fails twice from the neckline and bounces three times from the bottom. Trading strategy, o Buy on break and close above the neckline on high volumes. o Stop = Average True Range (ATR) of the pair below the neckline. o Target = upward projection of the distance between the neckline and the triple bottom 11. - 11 - All about investments. StockStream LLP Diamond Reversal This is a reversal pattern formed at the end of an uptrend. The pattern looks like a diamond. Trading volumes increase as prices diverge and decrease as prices converge. Trading strategy, o Sell on break and close below the support line of the diamond on high volumes. o Stop = Average True Range (ATR) of the pair above the break point line. o Target = downward projection of the height of the diamond. 12. - 12 - All about investments. StockStream LLP Flags This is a trend continuation pattern. It is called a bullish flag in an uptrend and a bearish flag in a downtrend. In a bullish flag the price moves up, consolidates in a channel and then continues with the uptrend. Trading strategy, o Buy on break and close above the consolidation channel on high volumes. o Stop = Average True Range (ATR) of the pair below the break point line. o Target = upward projection of the height of the up move before the consolidation (flag pole) 13. - 13 - All about investments. StockStream LLP Pennants This is a trend continuation pattern. It is called a bullish pennant in an uptrend and a bearish pennant in a downtrend. It is similar to a flag with the exception that the consolidation area looks like a pennant. Trading strategy, o Buy on break and close above the pennant on high volumes. o Stop = Average True Range (ATR) of the pair below the break point line. o Target = upward projection of the height of the up move before the consolidation (pennant pole) 14. - 14 - All about investments. StockStream LLP Rectangles Rectangular pattern is a consolidation after an uptrend or downtrend. Markets continue to trade in the direction of the trend after consolidating. Thus, it is a continuation pattern. Trading strategy (after uptrend), o Buy on break and close above the range top on high volumes. o Stop = Average True Range (ATR) of the pair below the break point line. o Target = upward projection of the height of the rectangle consolidation. 15. - 15 - All about investments. StockStream LLP Symmetrical Triangles A triangle is a consolidation pattern after an uptrend or downtrend. A symmetrical triangle has 2 symmetrical converging support and resistance lines. Trading strategy (after uptrend), o Buy on break and close above the resistance line on high volumes. o Stop = Average True Range (ATR) of the pair below the break point. o Target = upward projection of the height of the triangle. 16. - 16 - All about investments. StockStream LLP Ascending Triangle This pattern is formed after an uptrend and indicates increasing demand at higher prices. This pattern consists of a flat resistance line and an rising support line. Trading strategy (after uptrend), o Buy on break and close above the resistance line on high volumes. o Stop = Average True Range (ATR) of the pair below the break point. o Target = upward projection of the height of the triangle. A descending triangle is a similar pattern that is formed after a downtrend. 17. - 17 - All about investments. StockStream LLP Expanding Triangle This pattern is a mirror image of the symmetrical triangle. The volumes also increase as the triangle expands. Trading strategy (after uptrend), o Buy on break and close above the resistance line on high volumes. o Stop = Average True Range (ATR) of the pair below the break point. o Target = upward projection of the height of the triangle. 18. - 18 - All about investments. StockStream LLP Questions Visit and register at mystockstream.com Follow and interact with StockStream Experts for answers StockStream Education StockStream Forex StockStream Commodity StockStream India