As a fact, proven stock trading strategies have larger returns and lower risk ratios than the market averages. This is the reason why stock trading for beginner should be equipped with proven techniques so as not to lose much.

Some of the famed chart patterns to trade off include the Cup and Handle, Double Bottom and Flat Base. The Cup and Handle pattern, as the name implies resembles a cup with a handle. The cup is in the shape of letter “U” and the handle has a slight downward glide. The right-hand side of the chart entails low trading volume. The low trading volume could be as short as 7 and as long as 65 weeks.

The Double Bottom chart pattern describes the drop of a stock, a rebound, another drop to the same level as the original drop, and finally another rebound. The double bottom resembles the letter “W”. The twice touched low is deemed a support level.

There is also what is called Flat Base pattern. The pattern happens when the stocks that have large price gains stair-step upward to form even bases before resuming their up trend. This action may arise for quite a few times as a stock remains in an up trend. It could last from a few days to several weeks depending on some factors.

Aside from the 3 prominent patterns, there is also what is called the Symmetric Triangle, another essential stock trading pattern and its analysis could lead substantial gains. Said pattern occurs when after a stock makes a momentous move over a short period and then pulls back for a few weeks before making another noteworthy move upward.

This entry was posted on Tuesday, April 17th, 2007 at 5:55 am and is filed under Stock Investing Basics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.