December 05, 2012 at 09:00 AM EST
The 5 Most Important Chart Patterns For ETF Traders
Chart patterns are a very useful tool because they occur regularly—providing you with lots of trade candidates—and also provide everything you need to trade. When you spot an ETF chart pattern, and know how to utilize it, the pattern provides you with an entry point, stop-loss price as well as a profit target. While no strategy is perfect, and chart patterns don’t produce a profit all the time, learning to use them in your trading can greatly enhance your ability to analyze and profit from ETFs [see ETF Technical Trading FAQ]. 1. Head and Shoulders The head and shoulders is a topping pattern, signaling an uptrend is likely over and a downtrend is commencing. The pattern is created when the price rises (left shoulder), then dips, rises again to a new high (head), declines, and then rallies again but not as high as the previous rally (right shoulder). Usually the [...] Click here to read the original article on ETFdb.com. Related Posts: All Better Now? Many ETFs Climb Back Near Pre-Recession Levels Which Sector ETFs Are Cheap? May ETF Summary: Return to Old Form AdvisorShares Rolls Out SectorSAM ETF (SSAM) ETFs & Sector Rotation: Large Cap, Small Cap, Or International?
Chart patterns are a very useful tool because they occur regularly—providing you with lots of trade candidates—and also provide everything you need to trade. When you spot an ETF chart pattern, and know how to utilize it, the pattern provides you with an entry point, stop-loss price as well as a profit target. While no strategy is perfect, and chart patterns don’t produce a profit all the time, learning to use them in your trading can greatly enhance your ability to analyze and profit from ETFs [see ETF Technical Trading FAQ]. 1. Head and Shoulders The head and shoulders is a topping pattern, signaling an uptrend is likely over and a downtrend is commencing. The pattern is created when the price rises (left shoulder), then dips, rises again to a new high (head), declines, and then rallies again but not as high as the previous rally (right shoulder). Usually the [...]

Click here to read the original article on ETFdb.com.

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