1. Head and Shoulders
• Shape: Three peaks – middle one (head) higher than the two sides (shoulders).
• Meaning: Marks a trend reversal from bullish to bearish.
• Signal: Sell when price breaks the neckline (support line).
2. Inverse Head and Shoulders
• Shape: Like a regular head and shoulders, but upside down.
• Meaning: Reversal from a downtrend to an uptrend.
• Signal: Buy when price breaks above the neckline.
3. Double Top
• Shape: Two peaks at the same level, like an “M”.
• Meaning: Price tried to rise twice but failed – bearish sign.
• Signal: Sell when price breaks below the middle trough.
4. Double Bottom
• Shape: Two bottoms at the same level, like a “W”.
• Meaning: Price found support twice – bullish sign.
• Signal: Buy when price breaks above the peak between bottoms.
5. Rising Wedge
• Shape: Price rises within narrowing trend lines.
• Meaning: Weak upward trend – bearish reversal expected.
• Signal: Sell when price breaks below the wedge.
6. Falling Wedge
• Shape: Price falls within narrowing trend lines.
• Meaning: Weak downward trend – bullish reversal expected.
• Signal: Buy when price breaks above the wedge.
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📈 Continuation Patterns
These suggest that the trend will continue after a temporary pause.
7. Flags
• Shape: Small rectangle that slopes against the trend.
• Meaning: Quick consolidation before continuing trend.
• Signal: Buy/sell with the trend once price breaks the flag.
8. Pennants
• Shape: Small symmetrical triangle.
• Meaning: Short-term pause before continuing the trend.
• Signal: Enter trade when price breaks out of the pennant.
9. Symmetrical Triangle
• Shape: Two trend lines converging.
• Meaning: Market undecided – breakout expected either direction.
• Signal: Trade the breakout with volume confirmation.
10. Ascending Triangle
• Shape: Flat top and rising bottom.
• Meaning: Bullish – buyers are gaining strength.
• Signal: Buy when price breaks above resistance.