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Chart Pattern Encyclopedia

The most important chart formations explained clearly – how to spot them, how to trade them, and where their limits lie.

Reversal patterns

Bearish

Head and Shoulders

Classic top reversal: three peaks, the middle one (head) higher than the two outer ones (shoulders). A break of the neckline turns the uptrend down.

Bullish

Inverse Head and Shoulders

The mirrored H&S as a bottom reversal: three lows, the middle one (head) deeper than the shoulders. A break of the neckline upward turns the downtrend.

Bearish

Double Top

Two peaks of similar height at the same resistance, separated by a trough. Shaped like an “M”. A break of the trough signals the downward reversal.

Bullish

Double Bottom

Two lows of similar depth at the same support, separated by an intervening high. Shaped like a “W”. A break of the high turns the trend upward.

Bearish

Triple Top

Three peaks of similar height at the same resistance zone. A break of the shared support beneath them signals the downward reversal.

Bullish

Triple Bottom

Three lows of similar depth at the same support. A break of the shared resistance above them turns the trend upward.

Bullish

Rounding Bottom

A slow, U-shaped basing process: downward pressure gradually fades and smoothly turns into an uptrend.

Continuation patterns

Bullish

Bull Flag

A short, slightly downward-sloping consolidation (the “flag”) after a steep rally (the “flagpole”). The trend usually continues upward.

Bullish

Ascending Triangle

Horizontal resistance on top, rising lows below. Buyers push price higher into the same ceiling – when it breaks, the move usually continues up.

Bearish

Descending Triangle

Horizontal support below, falling highs on top. Sellers push price lower into the same floor – when it breaks, the move usually continues down.

Bullish

Falling Wedge

Two downward-sloping, converging lines. Despite the falling look, a falling wedge is usually bullish – selling pressure exhausts itself.

Bullish

Cup and Handle

A rounded base (cup) followed by a small consolidation (handle). When price breaks above the handle, the uptrend usually continues.

Bearish

Bear Flag

A short, slightly upward-sloping consolidation (the “flag”) after a steep sell-off (the “flagpole”). The downtrend usually continues.

Bearish

Rising Wedge

Two upward-sloping, converging lines. Despite the rising look, a rising wedge is usually bearish – upward momentum exhausts itself.

Neutral

Pennant

A small symmetrical triangle right after a strong impulse. Price usually continues in the direction of the preceding impulse.

Neutral patterns

Neutral

Symmetrical Triangle

Falling highs and rising lows converge. The direction is open – only the breakout decides which way it goes.

Neutral

Rectangle

Price oscillates between horizontal support and horizontal resistance. A sideways phase that can resolve in either direction.

Education, not investment advice. Chart patterns describe probabilities, not guarantees – they fail regularly. Always manage risk with stop-loss and position size.