by Rambus, Gold Seek:
One can only draw so many lines on a chart before they become completely confused on what trendline is actually important. Many will just starting connecting two top points and two bottom points and calling it a pattern. That’s not how you find a chart pattern. A chart pattern shows the fight between the bulls and the bears. Lets use a triangle as an example of the fight between the bulls and the bear in an uptrend.
If the stock is in an uptrend the first reversal point will be when the initial top takes place. This can be on any time frame. Next you need to see the bears take control and drive prices lower creating the first reversal point starting at the top. At some point the bears will run out of gas and the bulls come charging back rallying the price backup to another high that is slightly lower than the first reversal point number one high, before they run out of strength to move the stock higher. Once the lower high is in place you can put a number 2 under the first low inside the triangle.
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