10 Key Chart Patterns

Chart patterns are recurring price formations with predictable outcomes. They work because they reflect consistent human psychology — fear, greed, and indecision — that never changes.

Continuation Patterns

1. Bull Flag

Strong upward move (flagpole) followed by tight downward-sloping consolidation. Breakout targets the flagpole height added to the breakout point. One of the most reliable bullish patterns.

2. Bear Flag

Mirror of bull flag. Sharp drop followed by upward consolidation. Breakdown targets the flagpole distance below the consolidation low.

3. Ascending Triangle

Flat resistance top with rising lows. Buyers getting progressively more aggressive. Breakout above resistance = strong bullish move.

4. Descending Triangle

Flat support bottom with lower highs. Sellers increasingly dominant. Breakdown below support = sharp downward move.

Reversal Patterns

5. Head & Shoulders

Three peaks — middle (head) highest, two sides (shoulders) equal. Neckline break signals bearish reversal. Most reliable at tops of major uptrends.

6. Double Bottom

Two lows at the same level. Break above the middle high confirms bullish reversal. Target equals distance from bottom to middle high projected upward.

7. Double Top

Two highs at the same level. Break below middle low confirms bearish reversal. One of the most common patterns at market tops.

Advanced Patterns

8. Symmetrical Triangle

Converging trendlines — lower highs and higher lows. Can break either direction. Wait for the actual breakout before entering.

9. Rising/Falling Wedge

Rising wedge is bearish (despite upward movement). Falling wedge is bullish (despite downward movement). These counterintuitive patterns catch most retail traders off guard.

10. Cup & Handle

Rounded bottom (cup) followed by small pullback (handle). Strong bullish continuation. Break above handle resistance = entry point.