{"id":218407,"date":"2025-02-06T14:47:06","date_gmt":"2025-02-06T19:47:06","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?post_type=trading-lessons&#038;p=218407"},"modified":"2025-09-29T16:03:29","modified_gmt":"2025-09-29T20:03:29","slug":"identifying-basic-patterns-and-trends","status":"publish","type":"trading-lessons","link":"https:\/\/www.interactivebrokers.com\/campus\/trading-lessons\/identifying-basic-patterns-and-trends\/","title":{"rendered":"Identifying Basic Patterns and Trends"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<p>Hey everyone, welcome back to the next segment of our Point &amp; Figure chart series here at Interactive Brokers. We\u2019ve already covered why these charts are important and how the X\u2019s and O\u2019s get plotted. Now let\u2019s dive into what you can actually do with them\u2014namely, how to spot trends, support\/resistance levels, and basic patterns like double bottoms.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-spotting-trends-uptrends-amp-downtrends\"><a><\/a>Spotting Trends (Uptrends &amp; Downtrends)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Downtrends are super easy to identify because each new column of X\u2019s (up moves) is lower than the previous column of X\u2019s. You can literally connect those lower highs and immediately see prices stepping down.<\/li>\n\n\n\n<li>Uptrends work the same way in reverse: each new column of O\u2019s (down moves) bottoms out a bit higher than the last column of O\u2019s, so you know buyers are stepping in at higher prices each time.<\/li>\n<\/ul>\n\n\n\n<p>This clarity is one of the coolest things about Point &amp; Figure charts. By ignoring all the tiny intraday ticks, you see these overarching moves much more clearly.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-finding-support-amp-resistance\"><a><\/a>Finding Support &amp; Resistance<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>With Point &amp; Figure, once you\u2019ve set your box size and reversal amount, you can zoom out and quickly spot those major levels. For example, if Apple kept hitting roughly $195 before dropping into another column of O\u2019s, that\u2019s a clear sign of resistance at $195.<\/li>\n\n\n\n<li>Once you see those X\u2019s start printing above $195, that might be a breakout signal\u2014no more sellers hanging out at that price.<\/li>\n<\/ul>\n\n\n\n<p>Because the chart only updates when price moves by your specified box size, all the little noise is stripped away. You\u2019re basically seeing where real buyer and seller interest has kicked in.<\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-classic-patterns-double-tops-amp-double-bottoms\"><a><\/a>Classic Patterns (Double Tops &amp; Double Bottoms)<\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Double Bottom: You\u2019ll see two columns of O\u2019s come down to pretty much the same level before the price bounces back up. That\u2019s a strong sign that buyers are defending that area, making it a potential place to enter or add to a position if you\u2019re bullish.<\/li>\n\n\n\n<li>Double Top is the opposite: two columns of X\u2019s run up to around the same level and then retreat, hinting that sellers are stepping in repeatedly at that price.<\/li>\n<\/ul>\n\n\n\n<p>So that\u2019s the gist. Point &amp; Figure charts help you zero in on the big moves and filter out the static. If you\u2019re into trend trading, pattern recognition, or just want a clearer view of support and resistance, they\u2019re a phenomenal tool to have in your TWS arsenal. Stay tuned for more advanced setups and patterns in the upcoming lessons here at Interactive Brokers. See you next time!<\/p>\n\n\n\n<p><\/p>\n\n\n\n<p><\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-contributor\"><strong>Contributor<\/strong><\/h3>\n\n\n\n<p>Michael Nauss, CMT<\/p>\n\n\n\n<p>Substack: &nbsp;<a href=\"https:\/\/michaelnausscmt.substack.com\/\">https:\/\/michaelnausscmt.substack.com\/<\/a><\/p>\n\n\n\n<p>Site:&nbsp; <a href=\"https:\/\/www.statsedgetrading.com\/\">www.statsedgetrading.com<\/a>&nbsp;<\/p>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Recognizing Trends<br \/>\nDetermining uptrends and downtrends on point and figure charts.<br \/>\nSupport and Resistance Levels<br \/>\nIdentifying key price levels and breakouts.<br \/>\nSimple Patterns<br \/>\nDouble tops and double bottoms.<br \/>\nTriple tops and triple bottoms.<br \/>\nUsing Interactive Brokers&#8217; Tools<br \/>\nUtilizing TWS features to highlight patterns and trends.<\/p>\n","protected":false},"author":1087,"featured_media":218408,"parent":0,"comment_status":"open","ping_status":"closed","template":"","meta":{"_acf_changed":true,"footnotes":""},"contributors-categories":[18477],"traders-academy":[13125,13128,13114,13132],"class_list":{"0":"post-218407","1":"trading-lessons","2":"type-trading-lessons","3":"status-publish","4":"has-post-thumbnail","6":"contributors-categories-stats-edge-trading","7":"traders-academy-beginner-trading","8":"traders-academy-level","9":"traders-academy-stocks","10":"traders-academy-trading-lesson"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Archives | Traders&#039; Academy | IBKR Campus<\/title>\n<meta name=\"description\" content=\"Identifying key price levels and 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