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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

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.