TRADING

Blue Prints

Vijayan Ravichandran
SMTC Traders
 DESCENDING TRIANGlE PATTERN

How to Identify a Descending Triangle Pattern

1. A Flat Support Line

2. A Descending Trend Line, that Connects various Lower Highs
3. The Descending Trend Line and the Flat Line of Support Meets at a Point

This Pattern is Mostly Forming for Breaking of Important Support Level

DESCENDING TRIANGlE PATTERN
(In Uptrend)
DESCENDING TRIANGlE PATTERN
(in Downtrend)
 ASCENDING TRIANGLE PATTERN

How to Identify a Ascending Triangle Pattern

1. A Flat Resistance Line

2. A Ascending Trend Line, that Connects various Higher Lows
3. The Ascending Trend Line and the Flat Line of Resistance Meets at a Point

This Pattern is Mostly Forming for Breaking of Important Resistance Level

ASCENDING TRIANGlE PATTERN
(In Uptrend)
ASCENDING TRIANGlE PATTERN
(in Downtrend)
 Double Bottoms
How to Identify a Double Bottom Pattern
The reversal is made up of two consecutive bottoms with approximately similar equal lows.
The first low is formed when the bearish trend finds support.

1. First low (first price rejection): The market bounces higher and forms a swing low. Here,
it’s likely a retracement in a downtrend.

2. Second low (second price rejection): The market rejects the previous swing low. Now,
there’s buying pressure, but it’s too early to tell if the market could continue higher.

3. Break of neckline (an area of resistance): The price broke above the resistance and it
signals that buyers are in control. The market is likely to move higher.
Double Bottoms
 Double Tops
How to Identify a Double Tops Pattern
The reversal is made up of two consecutive tops with approximately similar equal Highs.
The first High is formed when the Bullish trend finds Resistance.

1. First peak: The market does a pullback; you can tell for sure if you will be a reversal as
trending markets do a pullback from time to time at this point.

2. Second peak: The same area rejects the market, again; it is the first sign that the market
could reverse even lower.

3. Break of neckline: Indicates that sellers are in control and the market could continue to
decline.
Double Tops
 Symmetrical Triangle Patterns
Pennant
How to Identify a Symmetrical Triangle Pattern

A symmetrical triangle chart pattern is a representation of a period of consolidation. It appears before the
price is forced to breakdown or breakout.
A breakdown from the lower trend line indicates the beginning of a new bearish trend. On the other hand, a
breakout from the upper trend line shows the beginning of a new bullish trend.

1. An ascending bottom trend line that goes in the upwards direction

2. A descending top trend line that goes in the downward direction.
3. The triangle has lower highs AND higher lows.
4. It looks like a funnel, with the price “squeezing” from the left towards the right

They can be grouped as places of indecision. A market stops for a while and future direction is doubted. The
forces of supply and demand at that moment are typically considered almost equal.
Symmetrical Triangle Patterns
( in Uptrend)
Pennant
Symmetrical Triangle Patterns
( in Uptrend)
Pennant
Symmetrical Triangle Patterns
( in Downtrend)
Pennant
Symmetrical Triangle Patterns
( in Downtrend)
Pennant
 Rising Wedge
(In Uptrend)
How to Identify a Rising Wedge Pattern

During an uptrend, a rising wedge is a reversal pattern. It forms when the price is making higher highs and
higher lows, which appears by a contracting range in prices. The price oscillates within two lines that move
closer together to make a pattern.

● Established uptrend
● Formation of rising wedge consolidation
● Linking higher highs with lower lows by using a trend line
● Confirm overbought signal by using technical tools
● Confirmation of divergence between price and volume by using a volume function
● Look for a break below support for short entry
Rising Wedge
In uptrend
 Rising Wedge
(In Downtrend)
How to Identify a Rising Wedge Pattern

During an downtrend, a rising wedge is a continuous pattern. It forms when the price is making higher highs
and higher lows, which appears by a contracting range in prices. The price oscillates within two lines that
move closer together to make a pattern.

● Established downtrend
● Formation of rising wedge consolidation
● Linking higher highs with lower lows by using a trend line
● Confirm overbought signal by using technical tools
● Confirmation of divergence between price and volume by using a volume function
● Look for a break below support for short entry
Rising Wedge
In downtrend
 Falling Wedge
(In Uptrend)

How to Identify a Falling Wedge Pattern

A falling wedge found in an uptrend is seen as a continuation pattern that comes up as the market temporarily
contracts. It shows the resumption of the uptrend. Again, this indicates that traders can look for potential
buying opportunities.

● Identify an uptrend
● Use a trend line to link lower highs and lower lows. The two lines will slope downwards and converge
● Observe for divergence between price and an oscillator
● Make use of other technical tools to confirm the oversold signal
● Look for a break above resistance for a long entry
Falling Wedge
(In Uptrend)
 Falling Wedge
(In Downtrend)

How to Identify a Falling Wedge Pattern

If the falling wedge shows up in a downtrend, it is seen as a reversal pattern. It exists when the price is
making lower highs and lower lows which form two contracting lines. The falling wedge usually precedes a
reversal to the upside.

● Use a trend line to link lower highs and lower lows. The two lines will slope downwards and converge
● Observe for divergence between price and an oscillator
● Make use of other technical tools to confirm the oversold signal
● Look for a break above resistance for a long entry
Falling Wedge
(In Downtrend)
 HEAD AND SHOULDER
How to Identify a Head & Shoulder Pattern

This is the first part of a head and shoulders chart pattern. It is the higher extended move that eventually causes exhaustion. As a general rule, the
longer the uptrend lasts, the more likely the reversal is to occur

Left Shoulder
As the market declines to form a higher low, things are beginning to come together, but we don’t quite have enough to draw the
neckline.

Head
Now that the left shoulder has formed, the market makes a higher high which forms the head. But despite the bullish rally, buyers are not
able to make a substantially higher low.At this point, we have the left shoulder and the head of the structure. The neckline is also
beginning to take shape, but the right shoulder is needed before we can draw the neckline on our chart.

Right shoulder
The right shoulder is where stock price rallies once again but fails to reach its initial high before it falls again. It shows that buyers are
getting tired and that the market may be gearing up for a reversal.
HEAD AND SHOULDER
 INVERT HEAD AND SHOULDER

How to Identify a Intert Head & Shoulder Pattern

The inverse head and shoulders pattern is an indicator. It shows a reversal of a

downward trend in price. It is one of the most common trend reversal indications.

As the price goes downward, it reaches a low point (a trough) and then starts to
recover and move upward. Market resistance then drags it back down into another
trough.
HEAD AND SHOULDER
TRADING
Blue Prints
Candlestick

Vijayan Ravichandran
SMTC Traders
CANDLE STICK
CANDLESTICK SAY’s STORY
CANDLESTICK SAY’s STORY
CANDLESTICK SAY’s STORY
CANDLESTICK SAY’s STORY
CANDLESTICK SAY’s STORY

GREEN CANDLE

Candle 1 is a long green one. Clearly the bulls won the game

RED CANDLE

Candle 2 is a long red one. Here, obviously the bears had the
upper hand.
CANDLESTICK SAY’s STORY

GREEN & RED CANDLE

Candles at 3 show small red or green

candles. Bears and bulls were about
evenly matched, and neither could get the
upper hand.
CANDLESTICK SAY’s STORY

GREEN & RED CANDLE

Candles at 4 show long lower wicks. These

mean that there was a see-saw battle in
which the bears pushed down the prices
significantly but the bulls made a comeback
to claw back the price towards the close.
CANDLESTICK SAY’s STORY

GREEN & RED CANDLE

Candles at 5 show long upper wicks. Here the

bulls had the upper hand for some time and
managed to push up prices, but then the
bears wrested control and pushed back the
prices.
CANDLESTICK SAY’s STORY

GREEN & RED CANDLE

Candles at 6 show long wicks at both ends of the

candles. These were obviously royal battles of
offensives and counter-offensives, but neither the
bulls nor the bears could achieve a net favorable
result, causing a stalemate around the open or
close price
 CANDLE STICK
Bullish Marubozu
 CANDLE STICK
Bearish Marubozu
CANDLE STICK
Spinning Top
 CANDLE STICK
BULLISH ENGULFING
 CANDLE STICK
BEARISH ENGULFING
CANDLE STICK
MORNING STAR
CANDLE STICK
EVENING STAR
 CANDLE STICK

ALL CANDLESTICKS SAY ONE CANDLE

HAMMER / HANGING MAN / INVERTED HAMMER /

PIN PAR / INVERTED PIN BAR
CANDLE STICK
CANDLE STICK
CANDLE STICK
CANDLE STICK
CANDLE STICK
CANDLE STICK
END OF SESSION