Trading
Chart patterns are recurring shapes that describe how a market consolidates before continuing or reversing. The 26 worth knowing are head and shoulders, inverse head and shoulders, double top, double bottom, ascending triangle, descending triangle, bull flag, bear flag, cup and handle, falling wedge, rising wedge, support and resistance, triple top, triple bottom, symmetrical triangle, rounding bottom, pennant, rectangle, ascending channel, descending channel, broadening formation, golden cross, death cross, bart pattern, wyckoff accumulation and wyckoff distribution. Each one has a trigger, an invalidation level and a rough measured target, and each one fails often enough that the invalidation matters more than the trigger.
How to use a pattern properly
A pattern is not a prediction. It is a structure that gives you three specific things, and the third is the one most people skip.
A trigger
The specific event that activates the idea, usually a close beyond a defined level rather than a touch of it.
A target
A rough measured move, typically the height of the pattern projected from the breakout point.
An invalidation
The level that proves you wrong. Decide this before you enter. This is the only part that actually protects you.
All 26 patterns
Head and shoulders
Three peaks with a taller middle one, signaling that buyers ran out of strength.
How to read itReversal, bullishInverse head and shoulders
The same shape upside down, marking the end of a downtrend.
How to read itReversal, bearishDouble top
Two attempts at the same high, both rejected.
How to read itReversal, bullishDouble bottom
Two tests of the same low that both hold.
How to read itContinuation, usually bullishAscending triangle
A flat ceiling with rising lows underneath, showing buyers getting more aggressive.
How to read itContinuation, usually bearishDescending triangle
A flat floor with falling highs above it, showing sellers pressing.
How to read itContinuation, bullishBull flag
A sharp rally, then a tight orderly pullback, then continuation.
How to read itContinuation, bearishBear flag
A sharp drop, a weak drift upward, then more selling.
How to read itContinuation, bullishCup and handle
A rounded recovery followed by a small dip, then a breakout.
How to read itReversal, bullishFalling wedge
Two downward sloping lines converging, with selling losing momentum.
How to read itReversal, bearishRising wedge
Two upward sloping lines converging, with buying losing momentum.
How to read itFoundationSupport and resistance
The single most useful concept on any chart, and the base for every pattern above.
How to read itReversal, bearishTriple top
Three attempts at the same high, all rejected, and the third one usually settles it.
How to read itReversal, bullishTriple bottom
Three tests of the same low that hold, with buyers stepping in at the same place each time.
How to read itContinuation, direction follows the trendSymmetrical triangle
Lower highs and higher lows squeezing together, with the break usually going the way the trend was already going.
How to read itReversal, bullishRounding bottom
A slow curved base where selling gradually gives way to buying, with no sharp low anywhere in it.
How to read itContinuation, follows the polePennant
A sharp move, a small symmetrical pause, then usually a continuation in the same direction.
How to read itRange, either directionRectangle
Price bouncing between two horizontal levels while the market makes up its mind.
How to read itContinuation, bullishAscending channel
Higher highs and higher lows running between two parallel rising lines.
How to read itContinuation, bearishDescending channel
Lower highs and lower lows running between two parallel falling lines.
How to read itReversal, usually bearishBroadening formation
Higher highs and lower lows at the same time, widening out like a megaphone.
How to read itTrend signal, bullishGolden cross
The fifty day moving average crossing above the two hundred day, read as confirmation that a longer uptrend has begun.
How to read itTrend signal, bearishDeath cross
The fifty day moving average crossing below the two hundred day, read as confirmation of a longer downtrend.
How to read itManipulation, crypto specificBart pattern
A vertical move, a flat stretch, then a vertical move straight back. The outline looks like a cartoon haircut, which is where the name came from.
How to read itReversal, bullishWyckoff accumulation
A long base where large buyers absorb supply before a markup, made popular in crypto by the schematic that names every phase.
How to read itReversal, bearishWyckoff distribution
The mirror image, where large holders sell into strength before a markdown.
How to read itAn honest note on all of this
Technical analysis is contested, and reasonably so. Some of what makes patterns work is self fulfilling: enough people watch the same shapes that their reactions create the move.
Two things are worth holding at once. Patterns describe genuine crowd behavior at levels where a lot of decisions were previously made. And any single pattern in isolation, without trend context and volume confirmation, is close to a coin flip.
Common questions
Do chart patterns actually work?
They describe real behavior and they are not reliable in isolation. Their value is in defining a trigger and an invalidation, which lets you manage risk. Treating them as forecasts is where people go wrong.
Which pattern is the most reliable?
Support and resistance, which is not really a pattern but the concept every other one is built from. Beyond that, patterns that agree with the higher timeframe trend fail less often than ones that fight it.
How do I know if a pattern has failed?
Define the invalidation level before you enter. If price closes beyond it, the pattern failed. Deciding afterward is how a small loss becomes a large one.
Where to go next
Spot these on a live chart with us
We look at real charts together and identify what is actually forming, including the cases where the answer is nothing and you should wait.