Understanding chart patterns is key to predicting price movements in trading. Here’s a breakdown of the three main types: Reversal, Continuation, and Bilateral Patterns.
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🔄 Reversal Patterns – Signal a Trend Change
These indicate the current trend may reverse direction.
1. Double Top – Bearish pattern with two peaks at resistance, then price drops. 🔻
2. Head & Shoulders – Three peaks, breaking below the neckline signals reversal. ⚠️
3. Rising Wedge – Price moves up within a narrowing range, then breaks downward. 📉
4. Double Bottom – Bullish pattern with two lows at support, then breakout upward. 🔼
5. Inverse Head & Shoulders – Three troughs with a break above the neckline. 🟢
6. Falling Wedge – Price tightens downward before breaking upward. 🚀
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📊 Continuation Patterns – Trend Likely to Continue
These show that the current trend is pausing before resuming.
1. Falling Wedge – Consolidates downward, then breaks higher. 📈
2. Bullish Rectangle – Sideways movement before a bullish breakout. ➡️🔼
3. Bullish Pennant – Small triangle after an uptrend, then continues higher. ⏫
4. Rising Wedge – Consolidation upward, then a bearish continuation. ⬇️
5. Bearish Rectangle – Range-bound movement before a drop. ➡️🔻
6. Bearish Pennant – Triangle after a downtrend, continuing lower. ⏬
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🔀 Bilateral Patterns – Breakout in Either Direction
These show uncertainty—wait for confirmation!
1. Ascending Triangle – Flat top, rising lows. Can break either way. 🔺
2. Descending Triangle – Flat support, falling highs. Watch for breakout. 🔻
3. Symmetrical Triangle – Converging trendlines with breakout potential both ways. ❓
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✅ Key Tips for Traders:
Reversal Patterns = Trend shift ahead
Continuation Patterns = Trend still strong
Bilateral Patterns = Breakout possible either way—confirm first!
Master these patterns to improve your trade entries, stop-losses, and take-profits. Trade smarter, not harder! 💡💰
