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Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Consequently any person acting on it does so entirely at their own risk. No representation or warranty is given as to the accuracy or completeness of this information. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. This information has been prepared by IG, a trading name of IG Markets Limited. Inverse ones, meanwhile, can lead to uptrends Standard head and shoulders, which can lead to bear markets.Triangles, which are often seen as a precursor to a breakout if the pattern is invalidated.They occur when a market consolidates after significant price action Pennants, which can lead to new breakouts.A falling wedge on a falling market – or a rising wedge on a rising market – can indicate an upcoming price reversal Wedges, which are used to identify reversals.Common patterns to watch out for include: Swing trading patterns can offer an early indication of price action. If the market does then move beyond that area, it often leads to a breakout. The more times a market bounces off a support or resistance line, the stronger it is seen as being. This makes them useful spots to identify so you can open and close trades as close to reversals as possible. When it hits an area of resistance, on the other hand, bears send the market down. When a market drops to an area of support, bulls will usually step in and the market will bounce higher again. They form the basis of the majority of technical strategies, and swing trading is no different. Support and resistance are areas on a market’s chart that it has difficulty crossing. So many swing traders will also use support and resistance and patterns when looking for future trends or breakouts. Indicators alone don’t provide a complete picture of a market. For this reason, many traders watch for when the two lines on a stochastic oscillator cross, taking this as a sign that a reversal may be on the way. An overbought or oversold reading doesn’t necessarily mean that a reversal is imminent – strong trends can stay in either territory for long periods.
