Dragon Pattern Trading in Forex Trading: A Guide

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Overview of the Dragon ⁣Pattern ‌in Forex​ Trading

The Dragon pattern⁣ is a highly reliable technical ​analysis ‍ tool used by ⁢Forex traders‌ to⁤ predict the‍ future ⁢change in the price of⁣ a particular currency ‌pair. It is a well-studied‌ and documented pattern that presents itself​ in the form of a “dragon’s head” ⁣shape on ‌the⁣ traders charts. The pattern predicts an upcoming reversal in ⁣the price ⁣trend, meaning that the price is expected to swing ‍in the opposite⁢ direction.‌ This⁤ can provide​ opportunities for traders to enter ⁤the⁢ market and‌ to⁤ take advantage of the potential‍ for profits. ‌Generally,⁤ when a Dragon pattern is​ formed, the price​ should move⁤ in ‌the predicted direction shortly thereafter.⁤

Trading⁤ the Dragon pattern requires ⁢a lot of⁢ patience and practice.⁣ It is important ⁢to recognize the signs of​ the pattern before entering into any trades. ⁣Additionally, it is important to properly ‍analyze the chart ‍in‌ order to properly identify ⁢a ⁢valid Dragon ⁤pattern. The accuracy of‌ the pattern⁢ is often dependent on the quality of ‍the analysis and the⁣ completeness of⁤ the ​pattern. Proper analysis is essential‌ if a trader plans to rely ⁣on the pattern for⁢ long-term gains.

Recognizing a Dragon​ Pattern

A Dragon pattern ‌consists of ⁢three parts. The “head” appears as a ​series of consecutive lows (Bottom 0, ‍Bottom 1, ⁤and ‌so on); the “belly” ⁢is composed of a series of consecutive highs (Top 0, Top ‍1,⁣ and⁣ so ⁣on);⁢ and ‍the “tail” ⁢is⁤ composed‍ of ⁣a​ single ​high or‍ low (Tail‍ or Tip). ​It is important to note⁢ that the head and tail must be connected by​ at least ⁢three consecutive lows ​or highs in order for the⁢ pattern ⁣to be valid. Additionally,​ the distance between the head‌ and tail ⁣must be within certain limits‍ (usually about⁤ a third‍ or ‍fourth of the ‌distance between the head and tail) for ‍the pattern ⁣to be valid. ⁢


The Dragon pattern is a reliable‌ technical‍ trading tool​ that⁣ can be used⁤ to ​take ​advantage of ​reversals in ⁣the Forex markets. It is important to ⁢recognize the ​signs⁤ of the pattern before taking any trades. Additionally, proper analysis of‍ the chart ⁤is necessary​ in⁣ order to recognize a valid Dragon pattern. With proper⁣ analysis and a solid strategy,‍ traders ⁢can use ​the Dragon pattern to generate consistent profits ​and increase their long-term⁣ gains. and objective

Dragon Pattern ⁢Trading ⁤Review

What is ⁢a Dragon Pattern?

The ‌Dragon ⁣is​ a chart pattern and a technical ‌analysis tool used in ‌forex trading. It is formed by two⁢ changes in the price of a currency pair‌ – first, an ‍upward ​spike‌ followed by a downward plunge, then a return to the ‍original level. ‌The⁤ pattern ⁢resembles a dragon, ‌hence its name. Many ‍traders use the‍ Dragon pattern as a signals for​ support⁤ and resistance ​levels and entry⁣ and exit​ points.

In What Way is ​the​ Dragon ‍Different?

The Dragon pattern is‌ very ⁣different from⁤ traditional chart ⁣patterns as it creates two ​bottom points where each point has a⁢ different​ low price. It is considered a bullish reversal ⁣pattern. It is also different from double-top or double-bottom patterns​ as the return to⁣ the same price point does ⁣not occur at the same ⁤level.‍

How to⁤ Use the Dragon Pattern?

The Dragon pattern is most effective​ if the trader⁤ is able‍ to⁤ identify support and resistance levels in the chart. ​The pattern ‍consists of⁤ three stages: a price spike followed by a plunge, a return to the original ‌level and ‌a double⁤ bottom point. The ⁢trader can enter when the price‌ tests ⁤the resistance‌ level and exit⁣ when the ⁢second ​bottom​ point hits⁣ the ⁢same resistance level. The Dragon pattern can also be used​ to understand potential breakouts and reserve entries.

The⁢ Dragon pattern is⁢ versatile and ⁢can‍ also help traders ⁤overcome trading difficulties, such‍ as breakouts or overtakes, by defining the entry and exit points. With‍ this pattern, ⁢traders‌ can​ also exit the market‍ while preserving⁣ their capital and reducing their⁢ risk​ associated with their trades.


The⁢ Dragon ‌pattern is a popular tool in technical‌ analysis,⁣ used⁢ primarily for day trading⁢ or swing ​trading. The pattern ⁢is more ​reliable than other ‍chart patterns,‌ as it shows a ‍change in momentum ⁣and direction, and provides ​the entry and⁣ exit points ​for ​the trader. The Dragon pattern can be used‌ as an alternative ⁤to other ‌chart patterns‌ such⁤ as double-top or double-bottom patterns. It is⁢ an​ effective⁢ tool for⁢ experienced traders​ and novice‍ traders alike.

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