The other day, I wrote an article about the Harmonic Patterns in trading and how they are pretty common in Forex and other markets. In the post, I made an example of a Bat Pattern and I got a lot of question about it. Not about that pattern in specific, but about the Batman chart pattern. Yes, it’s a thing, and it’s a common pattern, not as famous as other patterns, but it’s a thing.
Many people call this batman stock pattern, a meme pattern. Despite what people think, it’s true that price action patterns exist and can form a lot of different patterns. If you have enough time trading in the market, you should have noticed by now that this has a lot of psychology involved. We could assume to some extent that trading patterns work because of the psychological side of trading. For example, after a harmonic pattern, the price goes up, right? You and another one hundred people spot the pattern, wait for confirmation, and place an order. The price action is a reflection of people and companies’ actions (this is not manipulation). Price action is the imbalance of supply and demand.
Recommended Read: Trading Mindset
The fact that there are many people spotting a batman stock chart makes it tradable to some extent.
Basically it’s called “batman” because the price movements make the pattern form the top of the batman cowl. A Batman chart pattern consists of two legs (ears) and consolidation between. It’s really easy to spot. To some extent, the batman chart is a variation of the double top or bottom pattern.
It should not be confused with the bat or the gartley pattern, which are very similar too.
Recommended Read: Trends in Trading
That’s what you should look for when spotting a batman chart. Like many other patterns, it will have a higher chance of success if it happens at a key level.
Recommended Read: Areas in Trading
This is an example of the batman pattern
Whether you decide to trade it or not, it is always a good idea to know it, you never know when you will make use of it. Remember to study the market backstory and the psychology of traders, this way will be a lot easier for you to identify patterns and will give you higher success.
Recommended Read: Make a living trading futures
And as I always say, backtest in trading is your best friend and learn a lot