Advanced Chart Patterns Every Forex Trader in Singapore Should Know

Charting patterns have become important to Singapore forex traders due to their effectiveness in helping them identify the trends in the market and forecast the possible future trends in the price of currencies. Although simple shapes such as head and shoulder or double tops are well known, advanced shapes give more detailed information and more accurate signals. Knowledge of these patterns enables the traders in making wise decisions as well as having an enhanced performance on their trading activities.

The most useful and popular of these advanced chart patterns is the cup and handle pattern. It often develops during an uptrend and indicates more of the same, the continuation of the trend. The cup is rounded at the bottom and is the small consolidation area before the price shoots up to form the handle. This pattern can be pointed out to traders by a forex broker in Singapore since they possess technologically enhanced charting interfaces and live price feed. The breakout from the handle shows that the trend is probable to extend and afford a trading entry point in the favorable price.

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Another of the more complex formations that traders should know about is the “diamond” chart pattern. The diamond is the most important pattern that indicates a possible change in the current trend. It commonly emerges after a strong price movement and appears like an ascending triangle with a clear upper part and base. It can sometimes look like random movement when the price is only fluctuating between actions within diamond formation, but after it eventually extends beyond the pattern, quite a significant shift in trend may occur. This pattern is well seen when traders can name it and position themselves before it appears that the price is going to shift. A forex broker with an effective charting platform can assist traders in identifying this pattern in real-time in Singapore.

The “broadening formation” is an advanced pattern that is constructed when the price action starts to expand in both directions. The pattern associated with this configuration is like a megaphone and this usually shows up in more volatile conditions. A consolidation phase is where bulls and bears are battling for domination and the price swings aimlessly in a random direction, with higher highs and lower lows. In the event that the price pierces through the broadening formation pattern, it opens a strong directional trend. Alert traders are able to look out for this pattern and get ready for a breakout and the correct management of their trades.

The other types of chart formation that traders employ to try and identify potential moves are the “wedge” pattern which is considered an advanced chart formation. Depending on their location and orientation, wedges can be rising or falling, and that they indicate a reversal or continuation of the current trend would be a general observation. This pattern is formed when the price is contained within converging bearish trend lines in an uptrend; it is a bullish reversal signal. As for the falling wedge, this pattern is formed in a bearish market and looks to be an indication of bullish trade. By recognizing these wedges at an early stage, traders can avoid getting caught at complex conditions that would inform their choice of entry and exit points.

The highly advanced chart patterns are some of the areas whereby a forex broker in Singapore is relied on for assistance. With such enhanced charting tools, real-time market data and resources, a reputable broker ensures the traders are well equipped to identify such and trade them.

In Singapore, forex traders opting to trade in the forex market should consider learning the complex chart patterns to gain a competitive advantage. By and by, it does become helpful to study patterns and use them as timely indicators of market trends for making profitable trade. Having taken our time to explain these intricate patterns, it’s clear that there are resources that when applied can help traders to achieve better results in the volatile foreign exchange market.

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