Reading chart patterns like a pro gives you a serious edge in predicting market moves. Letโ€™s break down the three major types of chart patterns every trader must know: Reversal, Continuation, and Bilateral Patterns.

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๐Ÿ” Reversal Patterns โ€“ Signal a trend is losing steam and may flip direction

1๏ธโƒฃ Double Top โ€“ Bearish signal: Two peaks hit resistance, then price dives.

2๏ธโƒฃ Head & Shoulders โ€“ Classic bearish setup with three peaks, trend reverses after the neckline breaks.

3๏ธโƒฃ Rising Wedge โ€“ Price climbs within a tightening channel, then sharply fallsโ€”bearish cue.

4๏ธโƒฃ Double Bottom โ€“ Bullish alert: Two dips bounce off support before a breakout upward.

5๏ธโƒฃ Inverse Head & Shoulders โ€“ Bullish mirror of the standard version, pointing to a reversal rally.

6๏ธโƒฃ Falling Wedge โ€“ Downward squeeze followed by a breakout surgeโ€”bullish signal.

โžก๏ธ Continuation Patterns โ€“ Indicate the trend wants to keep going

1๏ธโƒฃ Falling Wedge โ€“ Bullish continuation: price compresses lower, then shoots up.

2๏ธโƒฃ Bullish Rectangle โ€“ Sideways grind before a bullish pop.

3๏ธโƒฃ Bullish Pennant โ€“ Quick consolidation after a strong uptrend, then another leg higher.

4๏ธโƒฃ Rising Wedge โ€“ Bearish continuation: tight upward grind, then breakdown.

5๏ธโƒฃ Bearish Rectangle โ€“ Range-bound pause before a move lower.

6๏ธโƒฃ Bearish Pennant โ€“ Brief rest after a downtrend, then another dip.

โ™ป๏ธ Bilateral Patterns โ€“ Breakout can go either way, so stay alert!

1๏ธโƒฃ Ascending Triangle โ€“ Flat top, higher lows โ€“ pressureโ€™s building. Breakout can go up or down.

2๏ธโƒฃ Descending Triangle โ€“ Flat support, lower highs โ€“ somethingโ€™s gotta give.

3๏ธโƒฃ Symmetrical Triangle โ€“ Coiling up for action. Direction unknown, but a breakout is near.

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Key Takeaways for Smart Traders:

โœ”๏ธ Reversal Patterns = Potential trend shift

โœ”๏ธ Continuation Patterns = Trend likely to continue

โœ”๏ธ Bilateral Patterns = Prepare for breakout in either direction

Mastering these patterns boosts your entry/exit strategy, risk management, and overall trading confidence!

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