Forex Chart Patterns With Examples & Explanations
Head and Shoulders
Example: Price forms a left shoulder, rises to a head peak, then forms a lower right shoulder.
Reason: Signals buyers are losing strength; potential bearish reversal.
Inverse Head and Shoulders
Example: Price creates a low (left), a deeper low (head), then a higher low (right shoulder).
Reason: Indicates bearish exhaustion and possible bullish reversal.
Double Top
Example: Price hits the same resistance level twice and fails to break.
Reason: Shows strong resistance — likely bearish reversal.
Double Bottom
Example: Price hits the same support twice and refuses to break lower.
Reason: Strong support — likely bullish reversal.
Ascending Triangle
Example: Horizontal resistance + rising support.
Reason: Buyers are becoming stronger; bullish breakout likely.
Descending Triangle
Example: Horizontal support + falling resistance.
Reason: Sellers gaining strength; bearish breakout likely.
Symmetrical Triangle
Example: Lower highs + higher lows forming a squeeze.
Reason: Indicates price compression — breakout in any direction.
Bull Flag
Example: Strong upward impulse followed by a small downward-sloping channel.
Reason: Shows continuation of bullish trend.
Bear Flag
Example: Sharp downward move followed by a slight upward pullback.
Reason: Continuation pattern signaling further downside.
Cup and Handle
Example: Rounded bottom (cup) followed by a small pullback (handle).
Reason: Bullish continuation after consolidation.