Chart patterns

[vishalalluri]

helloo al

can a ascending traingle formation be followed directly by a descending traingle formation if yes then what should be the volumes has been eating my head
seniors kinldy help in clearing this doubt of mine:sos:

i am posting the chart please letme know if this could be possible

 

[bunny]

Hi Vishal,
My approach to analyzing markets is, you know, is based on VSA. Though I know basics things about chart patterns like triangles, wedges, etc. I have few questions that haven't been answered on other forums. Please answer them for me.

1. Why do most ascending triangles break upwards?
2. Why do most descending triangles break downwards?
3. Why are converging patterns more common than broadening patterns?
4. Theoretically, which is a more potent pattern? ascending/descending triangles or symmetrical triangles?
5. Why do volumes usually reduce through the continuation?
6. Why does a close above/below the trendline signify a breakout/breakdown down? Why is so much importance attached to that straight line?

BTW, I think the ALOKTEXT bullish flag may not be valid because an clear and strong uptrend is missing in the background.

EDIT: I don't trade patterns, but just asking out of curiosity.

Thank you,
-Bunny.

 

[vishalalluri]

Hi Vishal,
My approach to analyzing markets is, you know, is based on VSA. Though I know basics things about chart patterns like triangles, wedges, etc. I have few questions that haven't been answered on other forums. Please answer them for me.

1. Why do most ascending triangles break upwards?
2. Why do most descending triangles break downwards?
3. Why are converging patterns more common than broadening patterns?
4. Theoretically, which is a more potent pattern? ascending/descending triangles or symmetrical triangles?
5. Why do volumes usually reduce through the continuation?

BTW, I think the ALOKTEXT bullish flag may not be valid because an clear and strong uptrend is missing in the background.

Thank you,
-Bunny.

hi bunny

i myself am a learner and looking for as much guidance for seniors

but i will give my thoughts on ur questions

1) in ascending traingle we see the upper line acts as a resistence and gets tested 2 -3 times and the lower slanting line is formed by joining higher lows which shows the trend is actually up . so what we look for is if the resistance if broken then we see a upward move

2) same opposite with descending traingles

3)
4)

5) the pattern starts to form after the prices have rallied upwards or downwards.
once the rally gets over trades are closed and profits are booked so wee see heavy volumes and during the continuation of pattern formation people look at the range bound movement .and they trade the pattern the range keeps reducing and the trades are more cautious as there would be an expectations of a breakout and when a breakout occurs they take fresh positions

for alok textiles if not a primary trend cant a secondary trend line be drawn as given by me in red parallel line

please correct me if wrong as ur experience might find my answers silly


edit : i dont trade patterns too and am still learning and sharing

 

[bunny]

^
I have added the 6th question too. Please answer if possible.

 

[vishalalluri]

Hi Vishal,
[*]Why does a close above/below the trendline signify a breakout/breakdown down? Why is so much importance attached to that straight line?
[/LIST]


Thank you,
-Bunny.

i had read about this in stockcharts hope this could answer ur question

Uptrend lines act as support and indicate that net-demand (demand less supply) is increasing even as the price rises. A rising price combined with increasing demand is very bullish, and shows a strong determination on the part of the buyers. As long as prices remain above the trend line, the uptrend is considered solid and intact. A break below the uptrend line indicates that net-demand has weakened and a change in trend could be imminent.

Downtrend lines act as resistance, and indicate that net-supply (supply less demand) is increasing even as the price declines. A declining price combined with increasing supply is very bearish, and shows the strong resolve of the sellers. As long as prices remain below the downtrend line, the downtrend is solid and intact. A break above the downtrend line indicates that net-supply is decreasing and that a change of trend could be imminent.

 

[bunny]

Thanks Vishal for your answers.

 

[bunny]

Ah, one more question:
Why is the trend line straight? Why are they not curved, as in why do they follow a liner equation and not a parabolic/hyperbolic one?

 

[vishalalluri]

Ah, one more question:
Why is the trend line straight? Why are they not curved, as in why do they follow a liner equation and not a parabolic/hyperbolic one?

when we have a trendline we get it onlt by joining

2 or more higher highs higher lows ( uptrend)
2 or more lower highs lower lows(downtrend)

if we just draw a parabolic line using all highs or all lows then i dont think we can get these trend lines as support or resistance it would be more of moving avergags
trend is short term /long term which helps us identifiy major price support or resistance

thats my piece of thought

 

[bunny]

when we have a trendline we get it onlt by joining

2 or more higher highs higher lows ( uptrend)
2 or more lower highs lower lows(downtrend)

if we just draw a parabolic line using all highs or all lows then i dont think we can get these trend lines as support or resistance it would be more of moving avergags
trend is short term /long term which helps us identifiy major price support or resistance

thats my piece of thought

You did not get my question.

Fox ex: See the below chart:

What I meant:
Why are points 3 and 4 in coherence with the line created by points 1 and 2?

 

[bunny]

hi bunny

i myself am a learner and looking for as much guidance for seniors

but i will give my thoughts on ur questions

1) in ascending traingle we see the upper line acts as a resistence and gets tested 2 -3 times and the lower slanting line is formed by joining higher lows which shows the trend is actually up . so what we look for is if the resistance if broken then we see a upward move

2) same opposite with descending traingles

3)
4)

5) the pattern starts to form after the prices have rallied upwards or downwards.
once the rally gets over trades are closed and profits are booked so wee see heavy volumes and during the continuation of pattern formation people look at the range bound movement .and they trade the pattern the range keeps reducing and the trades are more cautious as there would be an expectations of a breakout and when a breakout occurs they take fresh positions

for alok textiles if not a primary trend cant a secondary trend line be drawn as given by me in red parallel line

please correct me if wrong as ur experience might find my answers silly


edit : i dont trade patterns too and am still learning and sharing

1) That is what I am asking. Why do we see higher lows and lower highs?
5) So is there any professional interest during the consolidation period or it just the retail traders who keep trading among themselves?