Forex Chart Patterns – Saucers Chart Patterns
Posted on 26. Jul, 2007 by admin in Forex Chart Patterns
The Saucer Bottom is a very slow developing pattern that does not have a clear entry point in most cases. It becomes the foundation for a long term uptrend, but it often gives no direct signal to buy. The saucer represents a gradual loss of momentum in a downtrend, followed by consolidation in a sideways market, and an eventual return of the trend higher. A saucer may only be visible on a weekly chart, because the time it takes to develop is so long.
Because the saucer offers little in the way of a precise signal to enter a trade, and because it operates over such a long period of time, it is necessary to rely on other technical analysis to determine an entry point following a saucer formation. The saucer simply provides a foundation for a further move upwards, letting the trader know that the long-term bias will likely be to the upside.
One exception to this is the cup and handle pattern, which is demonstrated fairly closely above in the large saucer followed by a smaller saucer at the same horizontal level. In this case, once the smaller handle breaks above the high point at the end of the first saucer, a buy signal is generated. This pattern does not use any new principles, rather it is based on the relative high as a resistance level and the price breaking through resistance signaling a buy.
