Support and resistance lines are a widely used trading tool. We’ve outlined four price patterns that traders commonly use pattern recognition software to identify and how to interpret them. Pattern recognition software exists for a variety of potential price action patterns. Interpreting Four Popular Forex Chart Patterns Once they know what position to take when that pattern manifests, they can use pattern recognition software to alert them or trigger preestablished pending orders. In order for pattern recognition software to be useful, traders must understand what a given pattern indicates from a strategic standpoint. Using AI, pattern recognition software scans price action charts for specific breakout patterns that are commonly understood as indicators of market change, thereby alerting traders to possible profit opportunities and helping them manage risk. This type of software is used by traders in tandem with charting software to inform their trading strategy, timing, and position. Pattern recognition software is a broad name for programs that use mathematical algorithms and artificial intelligence to identify specific graphic patterns in price movement.
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