Using Technical Patterns to Spot Money-Doubling Trades

Here are a few of the classic chart patterns and technical analysis tools that lead us to triple-digit winners over and over again:

Bear Flag: A sharp, strong volume decline on a negative fundamental development and several days of sideways-to-higher price action on much weaker volume followed by a second, sharp decline to new lows on strong volume. The vertical downtrend that precedes a flag may occur because of buyers' reactions to an unfavorable company announcement, such as a court case, or a sudden and unexpected departure of a CEO. The sharp price decrease is sometimes referred to as the “flagpole” or “mast.”
Bearish Pennant: A sharp, strong volume decline on a negative fundamental development and several days of narrowing price consolidation on much weaker volume followed by a second, sharp decline to new lows on strong volume.
Breakout: A period where a stock's value increases. Typically immediately follows a consolidation.
Bull Flag: A sharp, strong volume rally on a positive fundamental development, and several days of sideways-to-lower price action. The vertical uptrend that precedes a flag may occur because of buyers' reactions to a favorable company earnings announcement, or a new product launch. The sharp price increase is sometimes referred to as the “flagpole” or “mast.”
Bullish Continuation Wedge: A bullish Continuation Wedge consists of two converging trend lines. The trend lines are slanted downward. Unlike the Triangles where the apex is pointed to the right, the apex of this pattern is slanted downwards at an angle. This is because prices edge steadily lower in a converging pattern i.e. there are lower highs and lower lows. A bullish signal occurs when prices break above the upper trend line.
Over the weeks or months that this pattern forms, the trend appears downward, but the long-term range is still upward. Volume should diminish as the pattern forms.
Bullish Pennant: A sharp, strong volume rally on a positive fundamental development, and several days of narrowing price consolidation on much weaker volume, followed by a second sharp rally to new highs on strong volume.
Candlestick: A charting method used to display open, high, low and closing prices for a security, it uses the top and bottom of its bar to indicate high and low prices of the time frame indicated.
Consolidation: A period where a stock's value declines.
Cup and Handle:  Similar in appearance to Rounded Bottoms, this pattern includes an elongated U-shape. However, the pattern also includes a short period of consolidation of 1–2 weeks in duration, which tends to be down-trending. The pattern is similar in appearance to a coffee cup with a right-side handle, and indicates the potential for an uptrend.
Diamond Patterns: These patterns usually form over several months in very active markets. Volume remains high during the formation of this pattern.
Diamond Bottom:  This pattern occurs because prices create higher highs and lower lows in a broadening pattern. Then the trading range gradually narrows after the highs peak and the lows start trending upward until they break upward through the diamond formation.
Head and Shoulders Top: An extremely popular pattern among investors because it's one of the most reliable of all formations. It also appears to be an easy one to spot. Novice investors often make the mistake of seeing Head and Shoulders everywhere. Seasoned technical analysts will tell you that it is tough to spot the real occurrences.
The classic Head and Shoulders Top looks like a human head with shoulders on either side of the head. A perfect example of the pattern has three sharp high points, created by three successive rallies in the price of the financial instrument.
The first point—the left shoulder—occurs as the price of the financial instrument in a rising market hits a high and then falls back. The second point—the head—happens when prices rise to an even higher high and then fall back again. The third point—the right shoulder—occurs when prices rise again but don't hit the high of the head. Prices then fall back again once they have hit the high of the right shoulder. The shoulders are definitely lower than the head and, in a classic formation, are often roughly equal to one another.
A key element of the pattern is the neckline. The neckline is formed by drawing a line connecting two low price points of the formation. The pattern is complete when the support provided by the neckline is broken to the downside on a closing basis.
Megaphone Bottom: Also known as a Broadening Bottom, it is considered a bullish signal, indicating that the current downtrend may reverse to form a new uptrend. This rare formation can be recognized by the successively higher highs and lower lows, which form after a downward move. Usually, two higher highs between three lower lows form the pattern, which is completed when prices break above the second higher high and do not fall below it.
Moving Average: The average price of a security over a specified time period (the most common being 20, 30, 50, 100 and 200 days), used to find pricing trends by flattening out large fluctuations.
Moving Average Convergence/Divergence: A technical analysis tool that shows the relationship between two moving averages of prices.
Resistance: Price levels where sellers have shown a better-than-average willingness to sell.
Reversal Patterns: These patterns break out in a direction opposite to the previous trend. They mark a change in direction of the price of the stock. After pausing to consider their investment strategies, investors decide to reverse an existing trend in a stock's price. Examples of this type of pattern include head-and-shoulders tops and bottoms, double-bottoms or -tops, triple-bottoms or -tops, ascending triangles, descending triangles and symmetrical triangles.
Rounded Top: This is considered a bearish signal, indicating a possible reversal of the current uptrend to a new downtrend. A Rounded Top is dome-shaped, and is sometimes referred to as an inverted bowl or a saucer top. The pattern is confirmed when the price breaks down below its moving average.
Support: Price levels where buyers have shown a better-than-average willingness to buy.
Trendline: A line constructed by connecting a series of descending peaks or ascending troughs. The more times a trendline has been touched increases the significance of a break in the trendline. A trendline can act as either a support line or a resistance line.