When it comes to trading, there are two types of patterns that can completely change your approach to the market: continuation patterns and reversal patterns. Mastering these patterns not only improves your timing for entry and exit — it can literally increase your portfolio tenfold by helping you follow powerful trends and avoid costly traps.
Let’s dive into both
1. Continuation patterns – Follow the trend like a pro
Continuation patterns signal that the current trend is likely to continue after a short-term consolidation. These patterns are powerful during strong market momentum and allow you to join the trend halfway with low risk.
Upper continuation patterns:
A. Bullish/Bearish flags
Structure: A sharp price movement (flagpole), followed by a small channel or rectangle in the opposite direction.
Meaning: The market pauses before continuation.
Entry: On breakout from the flag.
Pro tip: Best used during news-driven moves or high volatility.
B. Flags
Structure: Small symmetrical triangle after a strong move.
Meaning: Price is compressing before the next move up/down.
Entry: Breakout of the triangle with volume confirmation.
C. Rectangles (Consolidation Zones)
Structure: Price oscillates between two horizontal support and resistance levels.
Meaning: The market is indecisive — after the breakout, momentum resumes.
2. Reversal patterns – Turning points in the market
Reversal patterns help you catch trend changes — often before others even realize it. These patterns are critical for profiting near tops/bottoms and for early entry into new trends.
Upper reversal patterns:
A. Head and shoulders
Structure: One peak (shoulder), a higher peak (head), and another similar peak (shoulder).
Meaning: Bulls are losing strength; a trend reversal is likely.
Entry: Breakout of the "neck" confirms the pattern.
B. Double top / Double bottom
Structure: Two peaks or two troughs at similar levels.
Meaning: Strong rejection at a key level — reversal is imminent.
Entry: Confirmation after the price breaks through the "neck" (middle).
C. Falling wedge / Rising wedge
Structure: Sloping, narrowing price range.
Meaning: Momentum is weakening — a breakout in the opposite direction is likely.
Entry: Breakout of the wedge with volume confirmation is key.
Why these two types matter
You don’t need to memorize 50 patterns. Focus on these two main types — and learn to read market psychology through them.
Continuation patterns = Join large movements safely.
Reversal patterns = Enter early and lock in profits.
Whether you’re scalping on 5-minute charts or trading daily setups, these patterns work everywhere — cryptocurrency, forex, stocks.
Final tip: Combine patterns with indicators
Graphic patterns are most effective when combined with:
Volume – For confirmation
RSI/MACD – To determine momentum
Support/Resistance zones – For greater accuracy
Ready to increase your portfolio tenfold?
Traders who dominate the markets are not those chasing signals — they are those who understand structure and timing. Study these 2 types of patterns, practice spotting them, and your trades will never be the same.
