What is rounded chart pattern?

What is rounded chart pattern?

Hi friends!Hope you are fine. Today we will discuss an interesting topic Round Chart Pattern. A rounded chart pattern: Explaination A rounded chart pattern is a way to analyze the movement of prices in technical analysis. It is identified by the imitation of daily price movements, especially when the tops of the graph start curving downwards. This pattern indicates a possible trend reversal from an upward movement to a rounded top shape, suggesting a potential change in the direction of prices. The rounded pattern can develop over several days, weeks, months, or even years, involving prolonged periods of sideways movement with significant changes in the trend over time. It can be opposite to a rounded bottom pattern. Top Rounding Chart Pattern: A rounding top is a chart pattern used in technical analysis to identify potential trend reversals.The pattern is characterized by a curve that forms at the top of the price movement.It can take a long time to fully develop, ranging from months to sometimes years.Investors should be aware of this pattern in order to gauge complete price exhaustion. Understanding rounding top: A rounding top pattern resembles an inverted cup or "U" shape. It is similar to double top or triple top price patterns and can occur coincidentally. The basic point to recognize a rounding top pattern is to observe noticeable changes in the direction of prices from upward to downward. Acknowledging such a change can help traders earn profits or avoid buying in an unstable market or even make money through short selling. The three important aspects of a rounding top pattern are:A curved shape where prices increase, then decrease, and the trend becomes weaker.An inverse volume pattern (higher on both ends and lower in the middle) indicating the foundation of the pattern.Support levels based on the pattern. Rounding bottom chart pattern:A rounding bottom is a pattern used in technical analysis to understand price movements in trading. It looks like a "U" shape on a chart and is seen after a long period of prices going down. This pattern suggests a change in the long-term trend, indicating that prices might start going up. It usually takes a few weeks or months to form and is considered a rare occurrence by many traders. It's important to pay attention to both the volume (the number of shares traded) and the price movement to confirm the pattern. Here's how a rounding bottom works: At the beginning, the price goes down, showing that there's more supply than demand for the stock.Then, buyers enter the market and start buying the stock at a low price, which increases the demand.Once the rounding bottom is complete, the stock breaks out and continues to go up in a new upward trend.The rounding bottom pattern suggests a positive shift in market sentiment from bearish (negative) to bullish (positive).In simpler terms, a rounding bottom is a pattern that shows a potential turnaround in prices. It looks like a "U" shape on a chart and appears after prices have been falling for a while. When the pattern is complete, it suggests that prices might start rising. Traders pay attention to both the volume and price movement to confirm the pattern and make informed trading decisions.