Cypher Pattern
A cypher pattern is a technical analysis tool used to identify potential reversals in the price of a security. It is a chart pattern that consists of three consecutive price swings, or trends, that form a symmetrical pattern. The pattern is made up of two consecutive peaks and troughs, with the second peak and trough being higher and lower than the first. The pattern is used to identify potential reversals in the price of a security, as the pattern suggests that the price is likely to reverse direction after the third peak or trough.
History of the Cypher Pattern
The cypher pattern was first identified by trader Bill Williams in his book, New Trading Dimensions. Williams was a pioneer in the field of technical analysis and his book was one of the first to introduce the concept of chart patterns. The cypher pattern is one of the most popular chart patterns used by traders today and is widely used in both the stock and forex markets.
Comparison Table
| Pattern | Reversal | Price Action |
|---|---|---|
| Cypher | Potential | Three consecutive price swings |
| Head and Shoulders | Confirmed | Three consecutive peaks |
| Double Top | Confirmed | Two consecutive peaks |
Summary
The cypher pattern is a technical analysis tool used to identify potential reversals in the price of a security. It is a chart pattern that consists of three consecutive price swings, or trends, that form a symmetrical pattern. The pattern is made up of two consecutive peaks and troughs, with the second peak and trough being higher and lower than the first. The pattern is used to identify potential reversals in the price of a security, as the pattern suggests that the price is likely to reverse direction after the third peak or trough. For more information about the cypher pattern, traders can visit websites such as Investopedia, TradingView, and StockCharts.
See Also
- Head and Shoulders
- Double Top
- Double Bottom
- Triple Top
- Triple Bottom
- Rising Wedge
- Falling Wedge
- Flag Pattern
- Pennant Pattern
- Cup and Handle Pattern
