Markets / Chart Patterns

Chart Patterns

The classic shapes traders look for, what each one usually signals, and what counts as confirmation. Patterns are probabilities, not promises.

Head & Shoulders

Reversal
Bearish

Three peaks with the middle one highest; buyers are losing momentum.

Confirm: Close below the neckline on rising volume.

Inverse H&S

Reversal
Bullish

Mirror image: three troughs, sellers exhausted at the head.

Confirm: Close above the neckline.

Double Top

Reversal
Bearish

Price fails twice at the same resistance.

Confirm: Break below the middle trough.

Double Bottom

Reversal
Bullish

Price holds twice at the same support.

Confirm: Break above the middle peak.

Ascending Triangle

Continuation
Bullish

Flat resistance with higher lows — buyers step in earlier each time.

Confirm: Breakout above the flat top.

Descending Triangle

Continuation
Bearish

Flat support with lower highs — sellers press earlier each time.

Confirm: Breakdown below the flat base.

Symmetrical Triangle

Bilateral
Neutral

Converging highs and lows; a coiled range.

Confirm: Break in the direction of the prior trend, ideally with volume.

Bull Flag

Continuation
Bullish

Sharp rally, then a tidy downward-sloping channel as it rests.

Confirm: Break above the flag's upper line.

Bear Flag

Continuation
Bearish

Sharp drop, then a small upward drift before continuing.

Confirm: Break below the flag's lower line.

Cup & Handle

Continuation
Bullish

Rounded base followed by a shallow pullback (the handle).

Confirm: Breakout above the rim on volume.

Rising Wedge

Reversal
Bearish

Higher highs and higher lows but converging — momentum fading.

Confirm: Break below the lower trend line.

Falling Wedge

Reversal
Bullish

Lower highs and lower lows converging — selling drying up.

Confirm: Break above the upper trend line.