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MASTER THESE CHART PATTERNS & LEVEL UP YOUR TRADING GAME! 📊🔥
If you want to improve your trading decisions and avoid costly mistakes, learning to recognize chart patterns is a must. Here’s a simple breakdown of the three main types of patterns every trader should know:
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🔄 Reversal Patterns — Signals a possible trend change
1️⃣ Double Top: Bearish setup with two peaks at the same resistance, followed by a drop.
2️⃣ Head & Shoulders: Three peaks (shoulder-head-shoulder) — breaks the neckline for a trend reversal.
3️⃣ Rising Wedge: An upward narrowing pattern, typically breaking downwards.
4️⃣ Double Bottom: Bullish pattern with two lows at the same support, leading to a rise.
5️⃣ Inverse Head & Shoulders: Bullish reversal, breaking above the neckline after three troughs.
6️⃣ Falling Wedge: A downward narrowing pattern often breaking out to the upside.
🔄 Continuation Patterns — Confirms the current trend is intact
1️⃣ Falling Wedge: Bullish consolidation before a breakout higher.
2️⃣ Bullish Rectangle: Sideways range before continuing upward.
3️⃣ Bullish Pennant: Small triangle after a rally, usually breaking higher.
4️⃣ Rising Wedge: Bearish continuation before breaking down.
5️⃣ Bearish Rectangle: Sideways range before continuing lower.
6️⃣ Bearish Pennant: Small triangle after a drop, leading to more downside.
🔀 Bilateral Patterns — Can break either way
1️⃣ Ascending Triangle: Rising lows, flat resistance — breakout possible in either direction.
2️⃣ Descending Triangle: Lower highs, flat support — breakout could go up or down.
3️⃣ Symmetrical Triangle: Converging trendlines, breakout direction uncertain but imminent.
📌 Key Takeaways for Traders:
✅ Reversal Patterns = Trend change ahead.
✅ Continuation Patterns = Current trend likely to persist.
✅ Bilateral Patterns = Breakout