Pockets

Part of Art of Chart Reading

Pockets have a very special position within the core set of chart patterns. Unlike any other chart patterns, pockets are not defined by what is being there but what is missing. Pockets are very powerful price magnets often ignored by chart readers due to their subtle existence. Pockets can change the market dynamics at critical price zones thus one must pay attention to them.

Pockets are also called hidden gaps and voids. There are probably many other names due to the fact that it is not a classic chart pattern where a name was agreed upon way back when.

An Example Of Pocket

I am going to use the same 4 hour chart on euro dollar I used in the falling wedge example. This time, however, I zoom it out a bit more to show what happened before the wedge developed.

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