Lesson 5 of 5 · 6 min read
Patterns & volume
Breakouts, head & shoulders and why volume confirms everything.
Breakout
Sometimes a price moves sideways for a while (consolidation) and then suddenly breaks out. A breakout from such a range can start a new trend — especially if the volume comes along.
Head & shoulders
A classic reversal pattern: a high peak (head) between two lower peaks (shoulders). If the price breaks below the 'neckline', technical analysts see that as a sell signal.
Volume confirms
A move with high volume is more convincing than one on low volume. Volume = how many people really stand behind it. Patterns without volume are weak.
Important nuance
Technical analysis gives odds, not certainties. Patterns often fail. Combine it with risk management — never put everything on one 'nice setup'.
Remember this
- A breakout from a consolidation can start a new trend.
- Head & shoulders is a classic reversal pattern (break below the neckline).
- Volume confirms: moves with high volume are more convincing.
- Patterns give odds, not certainties — combine with risk management.
There is a quiz for this lesson
2 questions that check whether it stuck. They live in the app, because a quiz nobody grades teaches nothing.
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