Chart patterns
Zoom out from single candles and the same shapes show up again and again. Chart patterns are just support and resistance telling a story over many bars — and a few of them are worth knowing cold.
Two families: continuation and reversal
Every pattern falls into one of two camps. A continuation pattern is the market pausing before carrying on the same way. A reversal pattern is the market topping or bottoming and about to turn. Knowing which is which tells you whether to expect “more of the same” or “the tide is turning.”
Triangle
Price coils into a tightening range. Usually a continuation — it breaks the way the trend was already going.
Double top / bottom
Price tests a level twice and fails. A reversal — the trend ran out of fuel.
Head & shoulders
Three peaks, the middle highest. A classic reversal off a top (or bottom, flipped).
Trade the break, not the prediction
The mistake is jumping in because you think you spot a pattern. The discipline is to wait for it to confirm — usually a close beyond the key line (the neckline of a head & shoulders, the level of a double top, the edge of a triangle). No break, no trade. The pattern is a setup, not a crystal ball.
Patterns give you a target
A quiet bonus: most patterns come with a built-in measured move. Take the height of the pattern and project it from the breakout point — that’s a logical first target. Pair it with a stop on the other side of the pattern and your risk:reward is defined before you enter.
Triangles usually continue the trend; double tops/bottoms and head & shoulders reverse it. Trade the confirmed break of the key line, not the guess — and use the pattern’s height to set a measured target.
A head & shoulders pattern is typically a…
When should you act on a chart pattern?
Educational content only — nothing here is financial advice. Trading carries risk; never risk money you cannot afford to lose.