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When the price moves back and forth within parallel support and resistance lines, the pattern formed is a rectangular pattern. The formation of a rectangular pattern indicates a period of price consolidation, or indecision between buyers and sellers as both seek to control the market but neither one has the upper hand. Price will test the resistance and support levels of the rectangular pattern several times before finally breaking out of the rectangular pattern. After a breakout occurs, the price may continue to move in the direction of the breakout, which may be upward or downward. We just need to wait for the price to break through one of the lines and then choose the entry direction. Remember, when you identify the formation of a rectangular pattern, be sure not to forget the moment when price breaks out of the pattern! Bearish Rectangle A bearish rectangle pattern forms when prices consolidate during a downtrend for a short period of time. The reason for this pattern is that sellers may need to take a breather before pushing the price further lower. In this case, the price broke below the bottom of the rectangular pattern and continued its previous decline. If we had placed a short order below the rectangular support line, we might have made a nice profit on this trade. We have a suggestion: once the price breaks below the support line, the ensuing drop may be equal to the height of the rectangle. In the example above, the drop below the support line extends beyond the height of the rectangle, so there is an opportunity to capture more points this time. Bullish Rectangle Below is another type of rectangle pattern - the Bullish Rectangle. After experiencing an upward trend, the price trend pauses or undergoes a short period of consolidation. Can you guess where the price will go next? If you answered upward, then you are correct! The perfect upward breakthrough market appears here! If you answered upward, then you are correct! The perfect upward breakthrough market appears here! Pay attention to what the entire price trend looks like after the price breaks through the top resistance of the rectangular form. If we had placed a long order above the rectangular resistance line, we might have made some profits. As with the bearish rectangle, once price breaks out of the pattern, it will rise by at least the height of the rectangle.

Like the rising wedge, the falling wedge can also signal a reversal or continuation. When appearing as a reversal signal, it occurs at the bottom of a downtrend, signaling that a new uptrend is about to begin. When appearing as a continuation signal, it forms while an uptrend is in progress, meaning prices will restart the uptrend. Unlike the rising wedge, the falling wedge is a bullish pattern. In this case, the falling wedge acts as a reversal signal. After a downtrend, prices make higher highs and lower lows. Notice that the slope of the downtrend line connecting the highs is steeper than the slope of the trendline connecting the lows. After breaking through the resistance at the top of the wedge, the currency price trended perfectly upward, with an increase approximately equal to the height of the wedge pattern. In this example, the price reached the upside target and then moved higher. Let’s look at another example of a falling wedge acting as a continuation signal. As we mentioned before, when a falling wedge pattern forms during a rising price, it usually signals that the uptrend will resume soon. In this case, prices are settling into a consolidation pattern after a strong uptrend. This could mean buyers are simply taking a breather and may be gathering more hands to join the long ranks. If we had placed a stop entry order above the falling wedge's downtrend line connecting the highs, we might have captured this scenario's uptrend. The perfect upside target would be equal to the height of the wedge. If you intend to pursue more profits, you can choose to lock in part of the profit after the price reaches the target level and continue to hold the remaining part of the position. #ETH

When the price remains within the range of the upward sloping resistance line and the support line, a rising wedge pattern is formed. Here, the support line slopes more than the resistance line slopes. This means that higher lows are formed faster than higher highs. As prices consolidate, we know that a big move is coming, so we can anticipate that an upward or downward breakout is possible. If a rising wedge pattern forms after a rising move, it is usually a reversal bearish pattern. On the other hand, if it forms during a downtrend, it could signal a continuation of the downtrend. Regardless, the important thing is that once you identify the wedge pattern, you are ready to place your own stop entry order. In the first example, the ascending wedge pattern forms at the end of an uptrend. Notice how the price movement makes new highs at a slower rate than the rising lows. See how the price then broke through the support line and headed lower? This means there are more traders going short. They push prices below the uptrend line, which means a downtrend may be about to begin. As we discussed in previous lessons, the price decline after a breakout is approximately equal to the height of the pattern. Now, let’s look at another example of a rising wedge. But this time it plays the role of a continuation signal for the decline. As shown in the chart, the price experienced a period of decline before entering a consolidation period, during which the price continued to make higher highs and higher lows. In this case, the price broke below the rebounding uptrend line and extended the previous decline. That's why it's called a persistent signal. Pay attention to how the price exits a beautiful downward trend, and the amplitude and shape of the decline are highly consistent. What have we learned so far? A rising wedge forms late in an uptrend, which can lead to a reversal in price action, while a rising wedge forms during a downtrend, which is usually a signal of continued lower prices. Simply put, a rising wedge leads to a downtrend, which means the pattern is bearish.

Head and shoulders bottom, as the name suggests, is also a head and shoulders pattern, but this time the pattern is exactly the opposite of the head and shoulders top. In a downtrend, a trough (left shoulder) is formed, followed by a deeper trough (head), followed by a higher trough (right shoulder). As shown in the picture, you can see a typical head and shoulders bottom pattern. As this pattern forms, we can set a stop entry order above the neckline. Our method of calculating the profit target at this time is the same as the head and shoulders top pattern. First, we measure the vertical distance between the head and the neckline. This distance is almost equal to the possible rise in price after breaking through the neckline. As shown in the chart, the price made a nice upward move after breaking through the neckline. If the price reaches your profit target, you will be happy about it. However, here we will also tell you some other trade management skills. For example, you can lock in part of the profit after reaching the profit target, while continuing to hold part of the position in case the price may continue to move in the previous direction.

The head and shoulders top is also a trend reversal pattern. The pattern consists of a top (left shoulder), a subsequent higher top (head), and another lower top (right shoulder). The two points formed when the price fails to overshoot and falls back are basically at the same level. This level is the neckline we usually close at. When the price fails to rise for the third time, this neckline will be broken. As a result, the head and shoulders pattern was officially formed. In this example, we can easily see the head and shoulders pattern. On the way up, three peaks appeared. These three peaks are called the left shoulder, the head and the right shoulder respectively. Graphically, the highest points of the left and right shoulders are basically the same, while the highest point of the head is higher than the highest points of the left and right shoulders. As the head and shoulders pattern forms, we can place a stop entry order below the neckline. We can also set profit targets through the head and shoulders pattern. The method is to measure the vertical distance from the top of the head to the neckline. This distance is approximately equal to the distance that the price may travel after falling below the neckline. As shown in the chart, you can see that once the price falls below the neckline, the drop is at least equal to the vertical distance from the top of the head to the neckline. We know you are muttering to yourself, “The price is still moving lower after hitting the retracement target.” Our advice is, “Don’t be greedy!”.

The $BTC double bottom is also a trend reversal pattern, however, this time we will go long instead of short. This pattern occurs after a second decline in price, when two "troughs" or bottoms have formed. You can see from the chart above that after the previous downtrend, the price formed two troughs as the price struggled to fall below a certain level. Note that it is difficult for the second bottom to significantly fall below the first bottom. This signal indicates that selling pressure is about to end and a reversal is about to begin. Did you see it? The price breaks through the neckline and starts a nice uptrend. Notice that the price rise is almost the same as the height of the double bottom. Remember, like a double top, a double bottom pattern is a trend reversal pattern. You will see this pattern appear after a strong downtrend.

A double top is a reversal pattern that is formed after the second price top appears. A top is the high point of a price over a period of time. A top may be formed when the price reaches a certain level but is difficult to break through. When the price hits this resistance level, the price will encounter resistance and retrace slightly, but then rebound again to test the resistance level. If the price pulls back from around this level again, then we may see a double top pattern forming! In the chart above, you can see that the price formed two tops or double tops after a strong upward move. Note that it is difficult for the second top to break through the high point of the first top. This is a strong reversal signal and indicates that a reversal is imminent because it tells us that the buying pressure is about to end. As the double top pattern forms, we are able to place our stop entry order below the neckline in anticipation of a possible reversal in the uptrend. As shown in the chart, you can see that the price broke below the neckline and formed a perfect downtrend. Remember, a double top is a type of reversal pattern, so you will be looking for opportunities to form this pattern after a strong uptrend. You will also find that the price decline after falling below the neckline is consistent with the height of the double top. Keep this in mind as it will help us set our profit targets.

There are many trading elements, but different traders have different trading logics, and the elements are also very different. The three major elements I mentioned are just the main framework of my personal trading system. I hope not to mislead you. My trading method is very simple, which is to trade with the trend. If it rises, I will not go short. If it falls, I will not go long. It is a unilateral operation. The principle is very simple. Take a coin toss as an example. If the toss is two heads and one tail in a row, then I will bet on the most heads! Don’t ask why, knowing too much is not necessarily a good thing! My system is divided into three major parts: direction, rhythm, and kinetic energy! Direction: This is the most important thing that must be clearly defined first when opening the market; method: determining direction through structure + filtering rhythm with single moving average: it is the law of fluctuations, its rhythm of ups and downs, which is mainly used to determine the kinetic energy of the position: it is more The comparison of empty forces is mainly used to signal entry and exit. The kinetic energy weakens when exiting and the kinetic energy explodes when entering. Why is there no position management? Because I mainly do intraday trading, so I am not very strict about position management. Depending on my financial capacity, it doesn’t matter whether I have a light or heavy position. I only need to take positions that I can afford to lose! For me, trading means these three things. Don’t make everything complicated and maintain consistency, which is an excellent system.