Chart Pattern Trading Strategy — Insights and Backtest

As a technical trader, you must have encountered some chart patterns. They are an integral aspect of technical analysis, especially for discretionary traders. But what is a chart pattern trading strategy?

A chart pattern strategy is based on recognizable shapes on the price chart created by price movements. They can be identified with the help of trend lines, horizontal lines, and curves. In technical analysis, chart patterns represent a period of consolidation, which can signal a continuation of the prevailing trend or a transition from one trend to another.

In this post, we take a look at chart patterns and how to use them in trading. At the end of the article, we provide you with some data-driven statistics.