Cat’s Ears Pattern – What is it & How to Identify It

Chart Patterns

Cat’s Ears Pattern

Cat’s Ears Pattern is a double top pattern and also considers as one of the rarest patterns. The traders often confuses about the trades and make the most accurate predictions. They try to focus on making the possible scenarios for trading.

At the beginning of trading, the price movements seem totally random. You can easily identify the patterns in such situations. In addition, knowing about the pattern or tendency is really important whether it will continue or not.

The breaks are actually the ongoing trends that usually cause by profit-taking. Such breaks are short-term in nature, and this thing means that the trend will recommence in the almost similar direction after a very short resting time. There are a lot of patterns use in trading like Flags, Pennants, Wedges, Rectangles, and Cat’s Ears Pattern.

Cat’s Ear Pattern is the rarest pattern. This pattern actually looks like a pattern of cat ear and is a double top. It usually forms during any descending price trend.

Identifying of Cat’s Ear Pattern

When you look for any pattern of cat’s ears, then you must consider one this that it must have 6 phases. These phases are essential to know before the traders start trading. Below is the description of each phase:

  1. In First Phase the prices decline
  2. For Phase 2, there are silences for a while, or it usually moves in the horizontal direction
  3. In the 3rd Phase, the prices bump up shortly, and then they fall back quickly by generating the cat’s ear pattern on the left side
  4. At Phase 4, the oscillation of narrow range takes place and gives the form to the scalp of the cat
  5. In Phase 5, it bumps again and also recedes, it leads to creating the right of the ear
  6. At Phase 6, the worth breaks the funding line that defines by the scalp of cat, and then it further falls down

The cats’ ear pattern becomes effective when the value ends above the patterns’ low. Usually, in most cases, the levels of the volumes are typically great at the top of the cat’s ears, and they break the scalp of cat’s line. At the same time, you can observe the low volume in the 4th Phase. The length is almost between 10 days to 2 months of cats’ ears pattern.

Variations

Many foreign exchange brokers for this cat’s pattern. But they must remember one thing. There can be numerous variants. In many cases, the right and left ears of the cat may not be precisely the identical in standings of their height. Moreover, the scalp of the cat line can also be somewhat above or almost near Phase 2, a low level.

In most variants, the additional phase of the cat pattern is not present there at all, and if it is there, it can be long and also volatile.

Cats Ear Pattern is the most prioritised pattern for the traders who want to gain more profits in a short or very little time.

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