What is a Trading Pattern?
A trading pattern is a specific trend that occurs in the prices of securities that are traded over a discreet period of time. Typically, trading patterns are considered to be one aspect of technical analysis — a method that is used to determine the value of stocks, bonds and other securities. Technical analysis uses a macro approach to look at the trends in the market and trading patterns rather than what is occurring within a particular company. Fundamental analysis is another type of stock valuation and it is based on the way a company does business and its’ history. Trading patterns are identified in real time and can often be indicators of an overall market shift. The adage, “It’s a psychological market,” is a specific reference to trading patterns, or fluctuations that are often caused by public mood. Often there is a high degree of correlation between national or world events and the valuation of securities. Trading patterns occur during every type of economic cycle. There are at
