V Patterns

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BPT Trading Indicators - V PatternsWhat can we glean from V patterns in technical analysis? V patterns often occur in the markets but obviously not so frequently that you can count on them ever time a market moves. It may just retrace a bit and continue in the direction of the trade. It is hard to know whether it will be a true V pattern or not. However we can glean timing information from them when they occur.

Very often after a market breaks down from a resistance point or off a recent high/low we can use this concept to know the timing of the trade. We can see that the time a market creates the left side of the V, it will take an equal amount of time to create the right side of the V. Keep in mind it may not finish the right side of the V and hence not a V pattern. But if the full V is fully created, the trade will often stall at the completion of the V to get new market direction and often retrace from this point, to build momentum to go into the next pattern of the trade.The higher the time frame the chart is – the more likely this is to occur.

Keep in mind as well the V pattern maybe a sagging V not a perfect uniform V. The idea is it helps with timing only not actual price. We can use this timing phenomenon to help time a re-tracement point to use in getting on board a continuation pattern or a counter trend scalp. In the thumbnail, can you spot another perfect V pattern from a break down point?


Watch our Trader Tip on V-Patterns

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