Chart Patterns Flashcards
7 cards from real Day Trading practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Chart Patterns flashcards as text
In the context of a 'morning star' candlestick pattern, what does the middle candle represent?
Answer: Indecision and a potential shift in momentum
The middle candle of a morning star is a small-bodied doji or spinning top representing indecision and a potential turning point from sellers to buyers.
Which chart pattern is characterized by two swing lows at approximately the same price level separated by a peak?
Answer: Double bottom
A double bottom consists of two consecutive lows at roughly the same price separated by an intermediate peak, signaling a potential bullish reversal.
What distinguishes a 'flag' pattern from a 'pennant' pattern?
Answer: Flags have parallel trendlines; pennants have converging trendlines
Flags form with parallel trendlines (a rectangle-like channel), while pennants form with converging trendlines (a small triangle) after the flagpole move.
In day trading, a 'three black crows' pattern signals what?
Answer: A strong bearish reversal or continuation of a downtrend
Three black crows consist of three consecutive long bearish candles, each opening within the prior body and closing lower, signaling strong bearish momentum.
An 'ascending triangle' is considered bullish because of which structural feature?
Answer: The lower trendline slopes upward while the upper trendline is flat
An ascending triangle is bullish because higher lows (rising lower trendline) push against a flat resistance, indicating buyers are consistently entering at higher prices.
When day trading, what is the significance of a 'doji' candle appearing after a long bullish candle?
Answer: It signals potential indecision and a possible reversal
A doji after a long bullish candle signals that buying pressure may be waning, and combined with an overbought condition, a reversal may follow.
Which pattern is the inverse (bearish counterpart) of a cup and handle?
Answer: Inverse cup and handle
The inverse cup and handle is the bearish mirror of the cup and handle, signaling a potential breakdown below the handle's support.