How To Identify Price Patterns for Better Trade Entry In Forex?

One of the many ways of trading that many overlook is price patterns, these are formed all the time on the charts and help traders decide direction and probable movements. To an experienced trader they maybe able to see them all the time, however to the learner or average trader they may almost be invisible.

First of all, what is a pattern, it is a formation that is in everything, life, how a tree grows, Earths cycles, seasons, planetary movements, numbers and nearly just about anything. Same goes with psychology of the human mind and greed. And thus same goes with what is shown on Forex charts. That is what needs to be excepted as well, these patterns are literally everywhere. And even when we think there is no pattern there is a pattern forming in that type of thought form as well. Without these patterns we would seriously be in big trouble as well as it governs life cycles and other aspects that keep forming over time. So too, there is a spiritual aspect to these patterns as well, but that is not really what this post is about.

So too when these patterns are noticed on the charts and they can be traded with extreme high probability.

Here is an interesting tip I learnt a long time ago when first learning to trade is that the more beautiful a pattern formation is on the Charts the more likely this pattern will be respected.. This is so true in many ways. If the pattern looks clear and easy to see to the top traders then most likely the pattern will be traded as well by many others.

Understanding Patterns Equals Money

One of the attributes of these patterns is it allows us to determine changes in trend with less risk. By doing so it also allows us to set possible areas on the charts where price may retrace in these moves and then allow the trader using confluence to enter in an even better position than most other traders, thus allowing more pips and better profit.

Now these sorts of patterns are changing all the time, however this is the good part, once one forms just set alarms at the next pattern target and then decide from there whether to enter or not. These can also be used as blind order levels as well if you are very confident. The most important rule to follow though overall is not to ignore support and resistance at the same time.

bullish price pattern AUDUSD

Above – AUDUSD formed bullish price pattern

bullish price patterns EURUSD

Above – EURUSD Formed bullish price pattern

bearish price pattern on EURUSD

Above – EURUSD Bearish Price Pattern Formations

In the above examples these pattern formations will appear regularly on the Charts.. Look for them and you will see.

So, ultimately what one is looking for in these pattern formations is when they are starting to form where most likely price will go if it retraces on the same pattern. Pattern formation can be picked up on after only a few pattern moves as well. While not all patterns will continue, when the pattern emerges and you get in on it it allows the trader to basically get in at almost the perfect price within this pattern. That entails to one thing, lots and lots of profit. Trade the trades that form the patterns well and go to these areas and use other aspects such as price action, major support and resistance to be you guide on entry. This gives a double confirmation which is always good as well.

In the Video Above I will go over how to identify them within the charts because they can sometimes very hard to see with the untrained eye. If you enjoyed this post then i recommend bookmarking this page to go over again later and also commenting your thoughts or questions below.

About Timon Weller

Timon Weller is the professional Writer and Trader behind the blog Forex Reviews. Timon Weller is also a professional Teacher of Price Action Trading and creator of the popular Training Series teaching people how to trade Price Action effectively called The Engulfing Trader. For other Forex Training available here at Forex Reviews click here.

For more on Timon Weller Click Here. To Learn more about How to Trade the Market and get updates Click Here.


  1. Hi Tim, I am very grateful for a unselfish person that you are. I am slowly, but shurely recovering my hard earned losses by making use of your assistance.

  2. That’s was worth a knowledge aquisition.I really do appreciate work Mr. Timon. Good luck.

  3. Thanks Tim, I’m enjoying your weekly reviews as well. All these patterns always look good in hindsight, I just have real trouble in using them to predict movement. I have just blown out my account (not related to your advice), and I guess I am now shy to pull the trigger. Any advice on how to get my confidence back? best wishes, Stan

    • Hey Stan,
      Thanks for the comment, yeah to get back on track I highly recommend focusing on good money management, good structure Identification and good price action. These are three key components in trading. Improper Money Management being a key component that causes losses for a lot of traders other than a good strategy of course. I also recommend going back to basics again and doing lot’s of back testing and focusing on creating long term expectancy of a trading plan as well. Many traders go where you are right now, the positive you can see from it is to see it like a big learning curve and that you can come back better, keep positive, look at your weaknesses and focus on making them strengths.

      For Training as well if you have not already gotten access to already, I would recommend getting access to The Engulfing Trader –


  4. Thanks Timon, I have purchased the engulfing trader, and am downloading the 5 day one as I type this.
    You do seem to make it very easy!

  5. Loving this, I think the zigzag indicator makes it more easier and please can you do a comprehensive Video on patterns, but am so loving this already, Thanks Timon, my trading has improved big time.

  6. Cheers Timon,

    I learnt these a while ago and channels, triangle patterns (Ascending, descending and symmetrical) and Double Top and Bottom patterns where the ones I was most interested in. I even went with a head and shoulders pattern once and it made about 500 pips. I like the idea behind the triangle patterns because once they get to that infinite point (or near to) they should break, one way or the other. I have not as yet seen a cup and handle pattern though. I am however just concentrating on price action for now but if I spot a good pattern I may take the risk.



    • Ps. What are your views on Elliott Wave Theory? I did read recently that they used to work better on the old market (Whatever that means?). I couldn’t really test it because I would be using the weekly, plus it depends how you read the trend, assuming the trend completes, so I have left this alone for now.



      • Hey Philip,
        The main aspects of a Elliot Wave Theory is essentially a trend evidence pattern in the market. However I will say, it is not restricted to a time frame this pattern. While not referred to as Elliot Wave, aspects of this pattern in trend evidence trading are gone over The 5 Day Trend Training Series.

        Not true about the old market part, that is a myth, trend evidence movements has been the foundation of the market since the market began. It has never changed. Market is either in a uptrend, downtrend or a range trend ( sideways trend ).


  7. nice one

  8. Babul Akhtar says:

    Hi, Timon
    Another very informative article. Actually I can’t find appropriate words to appreciate you for helping traders. Sometimes I feel, I know it, but don’t know it perfectly, something is missing and we new traders always get those missing parts from you. As I got, the patterns you have drawn, each up moves are same size and each down moves are same size, where I was going wrong.

    Thank you very much. God bless you.

    Babul Akhtar

  9. Hello Timon,

    I always gain some much from watching your videos. I go over each training video more than once and even sometimes already familiar with the topic, I find myself amazed at the insight you have and share. I have seen a difference in my trading. Thank you !

  10. Jularat Janchok says:

    Thank you so much.

  11. Hi timon iv been useing c trader for 3 weeks now demo account thats uses real time price on the pairs used to lose loads on stop losses now i concentrate on price action confluence and high lots sizes ie 500.000 or 1000 uk pounds small movement 1.500 levarge been doing so well after listening to your advice thanks . Do you think 1.500 is to risky for real account cheers made 3000 pounds 2 days but the commission is 65 pounds a time on major pairs .

    • Hey David,
      Thanks for the comment. This one depends on account size. As you are using high leverage, most likely account size is quite small. I recommend keeping the risk per position in general below 2% of account size per trade ( with position sizing ) to follow good risk management aspects.

  12. josue miranda says:

    hello Timon once again thanks for always trying to help us with our trading very usefull stuff and very easy to understand God bless you my friend.

  13. Hello Tim,
    I love the way u make the channels so simple am beginning the see them on my charts. Thanks being there for us newbies. Hoping for more from u.

  14. Great review

  15. Dear Timon, I loved your part 7 training vid i find they are easy to understand and strait to the point, no babble so thanks for all your help i always learn something new and that’s what its all about really, i love the quiz i do them every time and im 9/10 so that great for me being a newby so take care and cant wait for the next one. sincerely roger.

  16. Thanks Timon, a very very nice and useful training video.

  17. russ weaver says:

    Another great tutorial, thanks Timon have a nice xmas.

  18. Njabulo Shange says:

    Timon Weller, you sir will see the promised land, your training and wisdom regarding the market is truly unmotivated by fame or wealth and for that I appreciate it, I’ll spread the word of your work in South Africa. Thank you, I hope one day I can meet you.

  19. Tim,
    Your videos are very educational, and I appreciate you posting them and helping others become profitable in trading

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