Trading
Charts 101CandlesticksIndicatorsRisk managementAll chart patternsHead and shouldersInverse head and shouldersDouble topDouble bottomAscending triangleDescending triangleBull flagBear flagCup and handleFalling wedgeRising wedgeSupport and resistanceTriple topTriple bottomSymmetrical triangleRounding bottomPennantRectangleAscending channelDescending channelBroadening formationGolden crossDeath crossBart patternWyckoff accumulationWyckoff distributionWhat moves marketsTradingViewMarket cap vs price
The short answer
The same shape upside down, marking the end of a downtrend.
What you are looking at
Three troughs with the middle one deepest, and a neckline drawn across the bounces between them.
How traders act on it
A close above the neckline is the trigger. Volume expanding on that break makes it more convincing.
Closes, not touches
Wait for a close beyond the level, not a touch. Intraday spikes through a level that reverse before the close are extremely common, and they exist partly because so many stops sit just beyond.When it fails
A break above the neckline that fails within a candle or two usually means the downtrend is still in control.
Failure is normal and it is not a problem, provided you decided your invalidation level before entering and sized the position so that being wrong is survivable. See risk management.
Context that changes the odds
| Factor | Improves the setup | Weakens it |
|---|---|---|
| Higher timeframe trend | Pattern agrees with the daily or weekly direction | Pattern fights the larger trend |
| Volume | Expands on the breakout | Breakout happens on thin volume |
| Duration | Formed over many candles | Formed over three or four candles, which is mostly noise |
| Level confluence | Trigger sits at a well tested level | Trigger sits in empty space with no history |
| Market conditions | Trending, orderly market | Choppy range, where nearly every pattern fails |
Other patterns
Head and shouldersDouble topDouble bottomAscending triangleDescending triangleBull flagBear flagCup and handle
Common questions
Does volume matter on the breakout?
It is the main confirmation people look for. A break above the neckline on volume noticeably higher than the preceding sessions is more convincing than a quiet drift through it.
What invalidates it?
A close back below the neckline shortly after the break, or a right shoulder that undercuts the head. Either means the buyers who took the level could not hold it.
Where to go next
All 26 patternsThe full set with diagrams.Risk managementSizing and stops.CandlesticksThe building blocks.
Practice spotting these
We go through live charts together and separate the real setups from the shapes your brain wants to see. That second skill is the harder one.