Bow-tie pattern

Developed at Definedge.

1. The bow-tie pattern is strong and uses a combination of triangle and broadening patterns.
2. 3-column triangle pattern (Read triangle pattern explanation to know more about the pattern)

Broadening pattern (Read about the broadening pattern to know more about the pattern)

It is a major reversal pattern. To find trade opportunities, look for a pattern of follow-through after this. Double top buy after the bow-tie pattern would be a bullish follow-through pattern and double bottom sell after the bow-tie pattern would be a bearish follow-through pattern.

This pattern can be plotted on the chart by adding it from the Add study menu in TradePoint & Patterns in RZone. The pattern is also available in the System Builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.