REVERSAL CHART PATTERNS, CONTINUATION CHART PATTERNS,
AND BILATERAL CHART PATTERNS
Chart
Patterns
Ultimate Guide
Alex Balingit
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1. Double Top
2. Double Bottom
3. Head & Shoulders
4. Inverse Head and
Shoulders
5. Rising Wedge
HARPER RUSSO
6. Falling Wedge
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Double Top
Here is what the pattern looks like on a chart:
SECOND TOP
FIRST TOP BREAKOUT
PULLBACK
NECKLINE
PRICE OBJECTIVE
What is a Double Top Pattern?
The Double Top is a typical pattern that consists of two highs
and one low. The price decline between two highs is the
pattern's primary feature.
The two highs, which are referred to as tops, display a
resistance line. In contrast, the price decrease reveals a
support level. A neckline is formed between the first bottom and
the second bottom after the price rallies lower following the
second top.
Double Bottom
Here is what the pattern looks like on a chart:
PRICE OBJECTIVE
PULLBACK
BREAKOUT
NECKLINE
FIRST BOTTOM SECOND BOTTOM
What is a Double Bottom Pattern?
The price hits a bottom and then rises back up before falling once more,
which is what the term "double bottom" denotes. These two bottoms are
identical in width and height and touch a support level.
To confirm a trend reversal, traders look for the candle that is just adjacent
to the Double Bottom.
The pattern depicts a conflict between bears and bulls. The bears initially
rule; after that, the bulls seize power. Before the bulls drive the price up
once more, the bears regain control.
A neckline is created by joining two high points at a resistance level once
the pattern has been recognized clearly.
Head and Shoulder
Here is what the pattern looks like on a chart:
HEAD
LEFT
RIGHT
SHOULDER
SHOULDER
NECKLINE
What is a Head & Shoulder Pattern?
A peak (the shoulder) is followed by a higher peak (the head), and
then another peak forms the pattern (shoulder). Right and left
shoulders are represented by the two shoulders. By connecting
the lowest points of the two troughs, a neckline may be created (a
stage which tells the prices are declining before rising again).
The price climbs quickly to the top before falling, according to the
Head and Shoulders pattern. The price then dips back down after
rising once more but this time to a higher level. Finally, the price
increases once more to a level comparable to the initial peak
before declining once more.
Inverse Head & Shoulder
Here is what the pattern looks like on a chart:
PULLBACK
LEFT SHOULDER RIGHT SHOULDER
HEAD
What is Inverse Head & Shoulder Pattern?
An upside-down head-and-shoulders pattern known
as an inverse head and shoulders is made up of a
low that serves as the head and two higher low
peaks that serve as the left and right shoulders.
In these patterns, the right shoulder is usually
higher than the left, however this isn't always the
case.
Rising Wedge
Here is what the pattern looks like on a chart:
PULLBACK
What is a Rising Wedge Pattern?
A bearish chart pattern called a rising (ascending)
wedge pattern indicates that a downside breakout is
about to occur. It is the opposite of the bullish falling
(descending) wedge pattern, which is a common
wedge pattern. Although the former is more frequent
and effective since it follows the general trend, a rising
wedge can also be a continuation pattern.
Falling Wedge
Here is what the pattern looks like on a chart:
PULLBACK
What is a Falling Wedge Pattern?
A bearish chart pattern called a rising (ascending)
wedge pattern indicates that a downside breakout is
about to occur. It is the opposite of the bullish falling
(descending) wedge pattern, which is a common
wedge pattern. Although the former is more frequent
and effective since it follows the general trend, a rising
wedge can also be a continuation pattern.
1. Falling Wedge
2. Rising Wedge
3. Bullish Rectangle
4. Bearish Rectangle
5. Bullish Pennant
6. Bearish Pennant
HARPER RUSSO
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Rising Wedge
Here is what the pattern looks like on a chart:
PULLBACK
What is a Rising Wedge Pattern?
A bearish chart pattern called a rising (ascending)
wedge pattern indicates that a downside breakout is
about to occur. It is the opposite of the bullish falling
(descending) wedge pattern, which is a common
wedge pattern. Although the former is more frequent
and effective since it follows the general trend, a rising
wedge can also be a continuation pattern.
Falling Wedge
Here is what the pattern looks like on a chart:
PULLBACK
What is a Falling Wedge Pattern?
A bearish chart pattern called a rising (ascending)
wedge pattern indicates that a downside breakout is
about to occur. It is the opposite of the bullish falling
(descending) wedge pattern, which is a common
wedge pattern. Although the former is more frequent
and effective since it follows the general trend, a rising
wedge can also be a continuation pattern.
Bullish Rectangle
Here is what the pattern looks like on a chart:
What is a Bullish Rectangle Pattern?
On a candlestick chart with a bullish breakout, price
moves sideways or in a range, forming a bullish
rectangle pattern.
Both a trend continuation and a trend reversal
pattern may be seen in this chart pattern. However,
due to its high success ratio, retail traders primarily
employ it as a continuation chart pattern.
Bearish Rectangle
Here is what the pattern looks like on a chart:
What is a Bearish Rectangle Pattern?
Rectangular bearish pattern The rectangular
bearish pattern is the exact opposite of the
rectangular bull pattern. In this pattern,
price breaks support and closes in the
breakout zone, and traders try to enter into
short positions.
Bullish Pennant
Here is what the pattern looks like on a chart:
What is a Bullish Pennant Pattern?
When the period of consolidation is ended, the bull
pennant, a bullish continuation pattern, suggests
the continuation of the rally. The pennant uses two
convergent lines for consolidation until the
breakout happens, as contrast to the flag where the
price action consolidates between the two parallel
lines.
Bearish Pennant
Here is what the pattern looks like on a chart:
What is a Bearish Pennant Pattern?
Bearish pennants are continuation patterns that
signal a price halt in the middle of a powerful slump,
giving you the chance to go short. These patterns
resemble a triangular flag as the price goes
sideways, making successively lower highs and
higher lows. They appear shortly after a rapid price
decline.
1. Ascending Triangle
2. Descending Triangle
3. Symmetrical Triangle
HARPER RUSSO
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Ascending Triangle
Here is what the pattern looks like on a chart:
What is a Ascending Triangle Pattern?
A chart pattern utilized in technical analysis is an ascending triangle. It is
made possible by price movements that permit the drawing of a horizontal
trendline along the swing highs and a rising trendline along the swing
lows. They intersect to form a triangle. Traders frequently look for triangle
pattern breakouts. Either an upward or downward breakout is possible.
Since price often moves in the same direction as the trend that existed just
before the triangle formed, ascending triangles are also known as
continuation patterns.
Because it offers a distinct entry point, profit goal, and stop-loss level, an
ascending triangle can be traded. It could be compared to a triangle that
descends.
Ascending Triangle
Here is what the pattern looks like on a chart:
What is a Descending Triangle Pattern?
Drawing a trend line that connects a series of lower highs and
a second horizontal trend line that connects a series of lows
results in the bearish chart pattern known as a descending
triangle.
Traders frequently look for a move below the lower support
trend line as it indicates that the downward momentum is
gaining strength and a breakdown is about to occur. After the
breakdown, traders aggressively help drive the asset's price
even lower by taking short positions.
Symmetrical Triangle
Here is what the pattern looks like on a chart:
What is a Symmetrical Triangle Pattern?
A symmetrical triangle is a type of chart pattern that
consists of two trend lines that converge and link a
sequence of peaks and troughs. These trend lines ought
to be convergent with a slope that is about equal.
Rising wedges, falling wedges, ascending triangles,
and descending triangles are all terms used to
describe trend lines that are converging at differing
slopes.
REMEMBER:
When used as a component of a
profitable, backtested, all-encompassing
trading strategy, chart patterns perform
admirably and are dependable. Success
in trading with these patterns also
depends on a trader's level of discipline
and proficiency in interpreting and
spotting these chart patterns. Partnered
with a good PROFITABLE Strategy, you
are good to go.
HARPER RUSSO
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