Course: Chart formations
Lesson Insights
Chart formations are generally categorized into two main groups: trend continuation formations and reversal formations. Trend continuation formations suggest that the current trend is likely to continue, while reversal formations suggest that a change in trend is likely to occur. For example, a flag formation may suggest that a trend is likely to continue, while a head and shoulders formation may suggest a reversal in the trend. Understanding these formations can help traders and investors make informed decisions about their investments and trades.
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