1. Trend line

This is the simplest form of technical analysis

Wait for 3 peaks or 3 lows in the price movement, draw a line connecting them and extend this line, and then wait until the market price returns to that line again. Then, make a trade at this 4th touch zone in the direction of the price (if the trendline goes up, then buy, if the trendline goes down-sell), or the trading breaks the trendline (if the trendline breaks up, then sell down, if the trendline breaks, buy-up )

It sounds simple, but the others are looking at similar charts, just like Alice, don't know which way to go.

See the example below of the DAX metrics

This is a strong uptrend with at least 5 touches (the more touches, the stronger the trendline) and then break.

After a strong 2.5-year period, the trend - even if it has broken - is still strong, so it will often turn back up to retest the highs of the trend line. This happened a few months later.

But what's important here is that the nimble traders had good trading opportunities.

2. Horizontal price zone - Darvas box

Nicholas Darvas was a trader who made $ 2 million in the 1950s, a time before the internet and global communities were born, and he only looked at price charts once a week.

The Darvas method is to define zones of sideways price movements - called a Darvas box - and either trade in that box or trade when the price breaks the box.

This is a good strategy and it allows traders to see which prices others are paying attention to, and possibly trade at those levels as well.

Take a look at this AUDUSD chart. Price ranges from 0.92 to 0.95. Traders view the 0.92 zones as a buying zone and they keep buying when the price touches it until it is broken.

Horizontal volatility zones and boxes, like the trendline, are important because it gives traders an important weapon they can use: a clear entry zone and a clear stop-loss zone, for good risk management.

3. Bunting Flag price model

A pennant Price Pattern is a Price Pattern that combines a trend line with a flat high and gives a good signal when it is broken.

The above example of the EUR shows the broken pennant pattern below and the price plummeting in the broken direction.

4. 2 high - 2 low price pattern

This pattern is often found at the top or bottom of a trend.

You can see a lot of the 2 high - 2 low price pattern in the previous examples above


If you are a fundamental investor and use a buy-and-hold strategy, the above-mentioned things are not very attractive to you. But if you are a trader with more actions, shorter orders, the above are the invaluable weapons you need to have in your arsenal.

It is also important that they are timeless - this means that there are many traders following these patterns from large timeframes to small timeframes.