Day Trading Chart Patterns


all right good evening everyone this is day-trader Rockstar and tomorrow’s Friday and I have a special video for you normally I would do a good watch list here but I want to do a combination of an educational video and then post my watch list on my website at www.export.gov R so I think this is one of the more important things to go over and that’s what I like to spend some time on it tonight today I was talking a lot about the Motorola chart I sent that chart out to everyone and and I was explaining why I was liking Motorola here now the thing about charts you know there’s a reason why they work because they’re widely followed and when a sharp fulfills it’s like breaks out of its formation a lot of people who follow this jump in and causing them actually fulfilled its own prophecy of continuing higher and this is a great thing about chart formations because they aren’t widely known well years ago they’ve been you know there’s a lot of study on the chart formations and the formulas that came up about it and why certain charts work better than other ones in the volume and how the volumes should show up and stuff but if you do a research on some of the best charts out there the best patterns and day trading you’ll notice a lot of them actually intersect each other and I’m gonna give an example about that now and why if you could find a pattern that intersects three patterns a pattern actually has two other patterns in it that pattern is actually going to be a better pattern for you so I want to give you a good example of Motorola when I first noticed Motorola it was a slanted W pattern which I always look for a slanted W pattern right here with a downward trend line and and what you want to do is usually break get a break out of this downward trend line now when you get a break out of the downward trend line you see here actually let me try to zoom it in a little you’ll see you’ll see a shoot up in volume that is volume right here it doesn’t happen for no other reason other than it’s a technical move and that just shows you how charts work a technical break of this trendline causes why in the comment causes the stock to spike up now we spiked up now zooming back out on this one that’s that’s how the W pattern downward trend line works alright so now we broke out of that and we’re consolidating it alright let me get rid of this right here we’re consolidating it into a pattern now now this is an excellent an excellent thing to do you would like to see a pattern like this form out of consolidation even a pullback and what’s going to happen here we’re gonna pull back to an area usually a moving average or a trendline here and we’re pulled right back to the trendline and we’re starting to show some support and we put the line up here as a resistance and you ended up making yourself another pattern here now all of a sudden this is a pattern in a pattern you have the W breakout now you had a consolidation now all of a sudden you have an inverted Head & Shoulders pattern so right here you have an inverted Head & Shoulders here’s a shoulder there’s a head and now this consolidation has made the other shoulder now becomes another charred pattern it’s an actually a stronger pattern alright and you can start actually predicting or forecasting a target for this as formulas you know will go deeply into this in a more educational videos later on but basically they say and also if you notice let me go over one more thing inside an inverted head and shoulders is usually a cup and handle so if you take out this don’t even consider this shoulder over here and just look at this little cup this little cup bowl action and then the handle and then you have a cup and handle so both this takes place on both of them I’m the invert in an inverted head and shoulder usually always has a cup and handle in it so you can look at it both ways a lot of people only look for the cup in handles I look for inverted head and shoulders because you’re getting more of a chart hence more of a history hence more of support and resistance to be able to use so now we have a neckline of the inverted head and shoulders also becomes the neckline of the cup and handle alright you take the distance between the top of the cup or the top of the head right down to the bottom in this case it’s a little jagged II so we’re just going to estimate and then you you extend that to the break out of the handle and that’s where you’re gonna have your target usually so right now I’m going to zoom out of here so you can you get a better idea where the target could bring us so we have a break out of this this neckline here which is going to be that that high on the 28th of right above 1590 we should the target should be right under 1640 which is a nice nice return for this breakout right here so there you have it a nice pattern inside a pattern you have actually three patterns here you have the W pattern which is my first key that something’s forming here after you have the W pattern you have the breakout that’s showing that you have more strength because we’re consolidating and we’re now pulling back now you have it inverted head and shoulders or a cup and handle now you look for the next one which is gonna be the confirmation and a real big move so this is why I like the Motorola here remember not all things work out all the time for whatever reason market conditions and stuff could send this out of the pattern and for that reason you always want to try to wait for this breakout and the volume to come into it to make this move to be able to get in in my case you know I begin in this because I’ve been seeing these things a lot happen I usually get in a little bit early but to be on the safe side you know try to once you break this high you could get in and pretty much you’re gonna see the volume carry higher all right so that’s that’s a little education there on the W pattern the inverted head and shoulder and a cup and handle and it had to predict the target or a forecast to target now this could apply to a lot of different stocks so let’s take a look at another stock right here this is FS LR we looked at this one yesterday was on the watch list and this is another nice pattern and I want to show you this is called a triangle pattern and I said this one has a good opportunity if we break out of this triangle we’re going to go up 20 points and what do we do when went up 20 points today so got in it if you were able to get in it early I sold it up I think it was up 19 points 18 points I sold I wasn’t worried about I think it might not want to even up a couple more points but it’s all about taking profits and this is a very good pattern also it’s a triangle pattern and if you look at the daily chart it actually is even a better pattern because you want to always check your 60-minute chart you want to check your daily chart and you want to go down into time increments to the 15-minute chart make sure everything is lining up perfectly and then you could pretty much time your entry looking at the daily chart here we see the perfect triangle pattern here yeah I’m just hi you have a downward trend line you have an upward trend line right here perfect coming to a point and then you had the breakout now normally they you know what they would tell you to figure out the to figure out the target for a triangle like this is you take the the beginning of the triangle and enough from the breakout you do the you do the extension but in this case and that really showed you I’m not getting a good char this is a new high in the stock so I’m not getting a good forecast I’m going to look at the 60-minute chart here and I could do the same thing so basically is zoom out a little here and again what I’m going to do is I’m going to add a couple of different patterns in a pattern and when you start seeing this it was actually a little channel right here and if this channels you know there’s also a channel pattern and when you break out of a channel you could go the same distance out of the channel up and I’m just curious to see if that breakout brings us you know pretty close to the target today but as you get through you’re learning these learning these programs I’m learning these chart patterns and stuff you’re gonna see how things work out I’ll give you a lot more examples and stuff this FS LR should head higher tomorrow depending on market conditions I would consider you know looking at this one and seeing this one going a little bit higher again we had a little cup and handle here and if I want to try to time the pattern here I would take this move it to the breakout and look we got a little bit higher here as our target all right so that’s a triangle pattern also you know the cup and handle it’s not really a handle it’s a really extended handle it’s more of a triangle pattern here and which is really strong pattern you get the volume breakout and all systems go a met I’m looking at a mat tonight as one on my watch list I also going to list my other watch other stocks on the watch watch list I’m going to put that on the site tonight WWE trader radio.com so come over and check it out I’m starting to like this one set it up into a nice W pattern here again a nice W pattern I don’t have much time on these Google videos so I hope they don’t cut me off and again this is a sloppy pattern right here but I’m starting to see AB W pattern here with a pullback and again now we’re starting to get that pullback to the moving average which you know was this is this one’s gonna be one to watch looking at the daily chart you can also see W pattern here forming and a downward trend line so I’m starting to like this one for a break about nineteen looking for you know we’re gonna go into this one more on the watchlist I’m gonna say goodnight right now because my video time is up I believe and be sure to check out live day trading radio a live internet broadcast of trading all day I’m on the radio eight o’clock to four o’clock and later trade in the markets calling the setups and come on by and take a look everything’s free and knowledge is great just share it and pass it on have a good night I’ll talk to you tomorrow on the radio you

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