CHART PATTERNS

A CHART PATTERN IS A GRAPHICAL PRESENTATION OF PRICE

MOVEMENT BY USING A SERIES OF TREND LINES OR CURVES.
CHART PATTERNS
 Triangle Patterns
What Are Triangle Patterns

▪ Triangle patterns are continuation chart patterns

that means the trend takes a break to gather
steam before the next breakout or breakdown
 Symmetrical Triangle Example
1

1. Rejection
2. Bulls step in 3

3. Lower High 5

4. Higher Low
5. Breakout
4

2
 ASCENDING TRIANGLE
This pattern showcases that there is a certain level that
the buyers cannot seem to get the price over known as
resistance

However, every times this level gets rejected, the bulls

are stepping in earlier and earlier and creating higher
lows

Ultimately this pattern is setting up for a breakout on

the upside
 Ascending Triangle Example

1. Rejection
2. Bulls step in
3. Rejection
4. Bulls Step in earlier
5. Breakout
 DESCENDING TRIANGLE
This pattern showcases that there is a certain level that
the sellers cannot seem to get the price below known as
support

However, every times this level gets rejected, the bears

are stepping in earlier and earlier and creating lower
high

Ultimately this pattern is setting up for a breakdown on

the downside
 Descending Triangle Example

1. Rejection
2. Bears step in
3. Rejection
4. Bears Step in earlier
5. Breakout
 FLAG PATTERNS

WHAT ARE FLAG PATTERNS ?

▪ These are trend continuation patterns that

are formed when the market consolidates
after a sharp move up or down
 BULL AND BEAR FLAGS
✓ Angle means everything when it comes to the probability of success.

✓ A 90 degree angle is the true bull/bear flag pattern. This gives the highest probability of success.
Anything less than 90 degress is referred to as an in-spirit of bull/bear flag.

✓ As the angle decreases, the probability of success decreases.

✓ If the angle of the candle formation is less than 45 degrees, the probability of success is 50/50 or
worse.

✓ When taking trades with one of the factors being a consolidation flag pattern (bull or bear) or in-
spirt of bull/bear pattern, only use 45 - 90 degrees, it is strongly suggested traders avoid less than
45 degrees.
 BULL FLAG
✓ Bull flag is a chart pattern
that occurs when a coin
makes a strong move up and
then takes a break

✓ The break looks like a flag

✓ If the coin breaks the

trendline resistance on the
flag, there is usually a
possibility that the coin may
continue moving up
 BEAR FLAG
✓ Bear flag is a chart pattern
that occurs when a coin
makes a strong move down
and then takes a break

✓ The break looks like a flag

✓ If the coin breaks the

trendline resistance on the
flag, there is usually a
possibility that the coin may
continue moving down
 DOUBLE TOPS & DOUBLE
BOTTOMS
✓ Double Tops occur when a high is made on a chart, the chart pulls back significantly and then
that same high is retested again. This is considered to be resistance and a pull back is expected.

✓ Double Bottoms occur when a low is made on a chart, the chart bounces back significantly and
then the same low is retested again. This is considered support and a bounce is expected.

✓ To be considering a Double Top or Double Bottom, the first low or high must be tagged or
pierced. The greater the distance between the two highs (Double Top) or two lows (Double
Bottom), the more significant the support.
 DOUBLE TOP
✓ Double top is a reversal
pattern formed when a coin
makes tow high of similar
price points

✓ Coin starts as an uptrend

✓ The pattern is completed

once the coin breaks the
neckline
 DOUBLE BOTTOM
✓ A double bottom is formed
when a coin makes tow lows of
equal price points. The pattern
looks roughly like a ‘’W’’.

✓ Coin starts as a downtrend

✓ The pattern is completed once

the coin breaks the neckline
 TRIPLE TOPS AND BEYOND
With a fundamental understanding of Double Tops/Double Bottoms under your
belt, it is time to take a look at Triple Tops, Quadruple Tops, Triple Bottoms,
Quadruple Bottoms and beyond.

1. When a chart tags a former high or former low for the first time, it is always the most
powerful. Odds of a reflex move are always greatest.

2. When a high or low pivot is tagged for the third time (Triple Top/Triple Bottom), the odds begin
to decrease of an inverse move. Triple Tops and Bottoms work maybe 60% of the time at best.

3. When a high or low pivot is tagged for the fourth time (Quadruple Top/Bottom), the odds
decrease even more, less than 50% of an inverse move.
In other words, the more times you hit a major high or low, the lower the odds of a pull back and
the greater the odds of a continued move through the level.
 REMEMBER THE RULE

Just like most pattern formations that signal an inverse move to the current trend,
they are ALWAYS best when they occur at the extreme of a chart.

1. Double Tops (Triple)..etc should occur at recent highs of a chart.

2. Double Bottoms (Triple)...etc should occur at recent lows of a chart.

 TRIPLE TOPS AND BEYOND
High Probability Of A Bounce Slightly Above 50/50 Probabilities Less Than 50/50 Probabilities

1 2 3

DOUBLE BOTTOM TRIPLE BOTTOM QUAD BOTTOM

 HEAD AND SHOULDERS
Head

Shoulder Shoulder

✓ Head and Shoulder patterns are bearish...when they trigger. Until then, they are just something to keep an eye on.

✓ Head and Shoulder patterns should resemble a human body. The more symmetrical (in comparison to a human body), the
higher the probability it has of triggering. They can be lopsided but generally the pattern should be easily recognizable.

✓ For best/ highest probability Head and Shoulder patterns, focus on those that occur at the highs on a chart (the head
should be the highest point in recent history). Head and Shoulder patterns that are in the middle of highs and lows can
play out, but probabilities shrink the lower in the historical chart they form.
 HEAD AND SHOULDERS

Neck - Line

✓ A neck-line is drawn from the point where the shoulder ends and the head begins. This will be the lowest point on either side of the head. Connect
them with a trend line.

✓ To be valid, a neck-line for a Head and Shoulder pattern MUST be flat or inclined. More precisely, it should be 90 degrees to 45 degrees. Any angle less
than 45 digress will not give a high probability.

✓ A Head and Shoulder Pattern ONLY triggers when the neck-line is broken (candle closes below).

✓ No Shoulder can be higher than the head. Think human body.

✓ A Head and Shoulder pattern fails when any candle closes back above then neck – line after it has closed below
 HEAD AND SHOULDERS
✓ Trend reversal chart pattern that is
formed by a peek (shoulder), followed
by a higher peak (head), and then
another peak (shoulder).

✓ Coin starts as an uptrend

✓ The pattern is completed once the coin

breaks the neckline
 INVERSE HEAD AND SHOULDERS

Shoulder Shoulder

Head

✓ Inverse Head and Shoulder patterns are bullish when they trigger. Until then they are just something to keep an eye on.

✓ Inverse Head and Shoulder patterns should resemble an upside down human body. The more symmetrical (in comparison to the
human body), the higher the probability it has of triggering. They can be lopsided but generally the pattern should be easy to
recognize.

✓ For highest probability inverse Head and Shoulder patterns, focus on those that occur at the lows on a chart (the head should be the
lowest point in recent history). Inverse Head and Shoulder patterns that are in the middle of highs and lows can play out, but
the probabilities shrink the higher in the historical chart they form.
 INVERSE HEAD AND SHOULDERS
Neck - Line

Shoulder Shoulder

Head

✓ A neck-line is drawn from the point where the inverse shoulder ends and the inverse head begins. This will be the highest point on
either side of the head. Connect them with a trend line.

✓ To be valid, a neck-line for an inverse Head and Shoulder pattern MUST be flat or declined. More precisely, it should be 90 degrees to
45 degrees. Any angle less than 45 degrees will not give a high probability.

✓ An inverse Head and Shoulder pattern ONLY triggers when the neck-line is broken (candle closes above).

✓ No shoulder can be lower than the lowest point of the head.

 INVERSE HEAD AND SHOULDER

✓ Trend reversal chart pattern that is

formed by a low point (shoulder),
followed by a lower point (head), and
then another low (shoulder).

✓ Coin starts as a downtrend

✓ The pattern is completed once the coin

breaks the neckline
 CUP AND HANDLE PATTERN
✓ This is a bullish pattern.

✓ The cup should form at recent lows for highest probability success. Generally, 180 candles prior on
any time frame you are looking at.

✓ The cup should be nicely rounded (does not need to be perfect but should be obvious).

✓ The handle should abide by the bull flag or in-spirit-of bull flag rules (45-90 degrees).

✓ The cup and handle pattern fails if the handle ever breaks the low of the cup.
 CUP AND HANDLE
✓ A pattern in which the upward trend has
paused but will continue in an upward
direction once the pattern is confirmed

✓ The pattern is completed once the coin

breaks the handle or the cup starting
point level

✓ Primary found on larger time frame.

Takes weeks to months to form at times
 INVERSE CUP AND HANDLE
(ROUNDED TOP)
✓ This is a bearish pattern.

✓ The inverse cup (rounded top) should form at recent highs for highest probability success. Generally,
180 candles prior on any time frame you are looking at.

✓ The inverse cup (rounded top) should be nicely rounded (does not need to be perfect, and rarely is,
but it should be obvious).

✓ The handle should abide by the bear flag or in-spirit-of bear flag rules (45-90 degrees).

✓ The inverse cup and handle (rounded top) pattern fails if the handle ever breaks above the high of
the inverse
 INVERSE CUP AND HANDLE
(ROUNDED TOP)
✓ A pattern in which the downward trend
has paused but will continue in a down
direction once the pattern is confirmed

✓ The pattern is completed once the coin

breaks the handle or the cup starting
point level

✓ Primary found on larger time frame.

Takes weeks to months to form at times
 MEGAPHONE PATTERN
✓ The megaphone pattern is a type of consolidation. It can be bullish or bearish.

✓ A bullish megaphone pattern has the highs and lows of the consolidation moving further apart. The
same angles apply for megaphone patterns as for in-spirit-of bull flags. 45-90 degrees to be valid.

✓ A bearish megaphone pattern has the highs and lows of the consolidation moving further apart. The
same angles apply for megaphone patterns as for in-spirit-of bear flags. 45-90 degrees to be valid.
MEGAPHONE PATTERN
CONSOLIDATION PATTERNS - BULLISH
MEGAPHONE PATTERN

BEARISH
CONSOLIDATION PATTERNS - BEARISH

BEAR FLAG IN – SPIRIT – OF BEAR FLAG BEARISH MEGAPHONE

 DOWNSLOPING VS. UPSLOPING
CHANNELS
1. Downsloping channels are bullish.

2. Upsloping channels are bearish.

This is very counter intuitive for investors as a downsloping channel has a chart
making lower lows and lower highs. Investors have been taught that is bearish but
it is actually a bullish setup and should be expected to break up.

Same thing applies to upsloping channels. Investors have been taught that higher
lows and higher highs is bullish. However, not in this case.
DOWNSLOPING VS. UPSLOPING
CHANNELS
THANK YOU