In Forex trading we have different types of chart patterns. The most common chart pattern that has been around since a long time is called lowly pullback. This type of chart pattern is also called the pennant or the flag. Fibonacci trading depends on this pullback for its normal functioning. You can also make trades using the moving averages or the moving averages envelopes. Some people also make use of Bollinger bands to identify the pullbacks.
All chart patterns are not entirely foolproof. Even a full fledged reversal seems like a pullback in the earlier stages. However that can be corrected when the market begins to move in the right direction before you enter the trade. As mentioned before, the simple pullback is the best chart pattern. It relates well to the psychological conditions of the market. Using the Copy Live Trades system will help you better understand these patterns. You will become a much better trader this way.
There is also the candlestick chart pattern that is common in Forex trade. Doji is a very popular candlestick pattern. This pattern is formed when the opening and the closing price are virtually equal. Then there is the hammer candlestick pattern which is formed due to the decline or possible reversal in the market.
It is so called because of the short body and the long wick which looks like a hammer. The third type of candlestick pattern is called engulfing pattern. This pattern can be seen between two candlesticks. In this case one candlestick engulfs the other as the candle body of the previous day is engulfed in the body of the candle on the next day.
