If you’re a beginner trader or professional, you need to know that trading chart patterns are like a secret weapon in forex, Crypto, and stock markets. They help you to identify any currency movements, spot trends, and to place a precise entry in the market. If you’re trading stocks, forex, or crypto, these patterns can help a lot and make your trading effective.
In this lesson, we will discuss 34 chart patterns from beginner-friendly to advanced level patterns, you will learn how to identify them and use them in your trading strategy. Let’s get started!
What Are Trading Chart Patterns?
Chart patterns are visual images created by the movement of any currency prices on a trading chart. They indicate the psychology of traders and provide evidence about future price movements of currency pairs. These patterns are used by traders to identify trend reversals, continuations, and breakouts.
Why Are Chart Patterns Important?
Predict Trends: They help you to take trades where the market is near the point of interest. So you should analyze the chart patterns and get into the market.
Identify Opportunities: They show you when to take an entry or exit a trade.
Risk Management: They help you to identify your stop-loss and take-profit levels in the market.
Versatility: The chart patterns strategy works in all markets like stocks, forex, and crypto.
Reversal Trading Chart Patterns
Reversal patterns indicate a change in the current market trend. If the market is in the bullish state or in bearish, these chart patterns will help identify the key reversal points, where you can take entry or exit from the market.
1. Head and Shoulders pattern
This is one of the best chart patterns. It looks like a peak (head) with two smaller peaks (shoulders) on both sides, similar to a human body.
- What it means: it gives us a Signal of a bearish trend after an uptrend ends.
- How to Trade: Sell when the price breaks below the “neckline.” Keep your stop loss above the previous high and take profit at the previous low.
2. Inverse Head and Shoulders pattern
This is opposite of the head and shoulders pattern, which we discussed in the previous paragraph. It has the same head and shoulder on both sides in a downward direction.
- What it means: it gives us a signal of the bullish trend and the end of a bearish trend.
- How to Trade: Buy when the price breaks above the neckline, keep your stop loss below the low and stop loss above the high.
3. Double Top pattern
A double top pattern forms when the price hits the same resistance level twice and fails to give a breakout, so the market starts moving downward.
- What it means: This pattern indicates a bearish trend has started, and the bullish trend will end.
- How to Trade: Sell when the price gives a rejection from its resistance level and breaks its previous low. Take entry there, set your stop loss at the previous high and your take profit at the previous low.
4. Double Bottom pattern
The opposite of a double top pattern, this pattern forms when the price hits the same support level twice and bounces back, and the uptrend begins.
- What it means: it’s a Signal of an uptrend has started and the end of the downtrend.
- How to Trade: Buy when the price breaks its previous high, take your entry there, keep your stop loss below the support level and your take profit at the previous high.
5. Triple Top pattern
Similar to a double top pattern, but this pattern has three peaks. When the market gets rejected from its resistance level for the third time, this pattern forms.
- What it means: This pattern indicates a strong bearish reversal and the end of an uptrend.
- How to Trade: Sell when the price gets rejected from the resistance level by the third time. Take entry there, keep your stop loss above the resistance level and your take profit at the previous lower low.
6. Triple Bottom pattern
Similar to a double bottom and the opposite of the triple top pattern. When the price gets rejected by the third time from its support level, so the uptrend will begin and the downtrend will end.
- What it means: it’s a signal of strong bullish reversal. And the end of a downtrend.
- How to Trade: Buy when the price gets rejected and breaks its previous high. Take entry there, keep your stop loss below the support level and exit at the previous high.
7. Rounding Bottom pattern or (Saucer Pattern)
This chart pattern looks like a round bottom and indicates a bullish trend.
- What it means: This chart pattern indicates the end of slow and consolidated market price.
- How to Trade: Buy when the price gives a strong breakout at the resistance level. Keep your stop loss at the recent lower low, and your take profit at the previous high.
8. Rounding Top pattern
The opposite of a rounding top chart pattern. It looks like a rounded top and indicates a downtrend in the market.
- What it means: it’s a signal of a downtrend when the market gives a strong breakout at the support level.
- How to Trade: Sell when the price breaks below the support level. Take entry there, keep your stop loss above the previous high, and your take profit below the previous low.
9. Rising Wedge pattern
This chart pattern looks like a bearish reversal pattern that forms during an uptrend. This pattern can be identified easily when the market makes higher highs and higher lows.
- What it means: it’s a clear Signal of a downward reversal and the end of an uptrend.
- How to Trade: Sell when the price breaks its recent low. Take entry there, keep your stop loss at the previous high and your take profit at the previous low.
10. Falling Wedge pattern
A bullish reversal chart pattern that forms during a downtrend when the market makes lower highs and lower lows.
- What it means: it indicates a strong upward reversal, and the end of a downtrend.
- How to Trade: Buy when the price breaks its previous lower high. Take entry there, keep your stop loss below the previous low and take profit on the previous high.
Continuation Trading Chart Patterns
Continuation patterns form when the market is in a trend but starts consolidation, then breaks its resistance level, and again starts in the uptrend direction.
11. Ascending Triangle pattern or bullish Pennant Pattern
This chart pattern forms when the price creates higher lows in a triangle form and consolidates in the same range.
- What it means: It suggests a bullish breakout and the end of a consolidation phase.
- How to Trade: take entry when the price breaks above the resistance level. Keep your stop loss below the resistance level after the breakout, and take profit above the previous high.
12. Descending Triangle pattern bearish Pennant Pattern
The opposite of an ascending triangle chart pattern, this pattern forms when the price is in a downtrend but creates a lower high, and starts consolidation in a triangle form.
- What it means: it’s a signal of a bearish breakout, and the end of consolidation.
- How to Trade: take a Sell when the price breaks below the support level. Keep your stop loss above the previous high and your take profit below the previous low.
13. Symmetrical Triangle pattern
This chart pattern is created when the price creates lower highs and higher lows, and forms a triangle. In this case, the market can be in an uptrend or downtrend, but we will wait for a strong breakout to take entry.
- What it means: a break out on either side can be a strong reversal.
- How to Trade: Wait for the breakout of the price from the triangle and trade in the direction of the trend. Keep your stop loss below the previous high if it breaks downward and take profit below the previous low.
14. Bullish Flag Pattern
A short-term consolidation pattern that forms after a strong price movement in an uptrend. This pattern is in the form of a flag.
- What it means: The uptrend will be continued after a consolidation of the price.
- How to Trade: Trade when the market gives a breakout in the resistance level. Take entry there, put your take profit above the previous high, and stop loss below the recent low.
15. Bearish Flag Pattern
This chart pattern is the opposite of the bullish flag pattern. This pattern forms in a downtrend of the market and it’s like an inverted flag.
- What it means: Indicate that the downtrend will be continued after the breakout.
- How to Trade: Trade when the market gives a breakout in the support level. Take entry there, put your take profit below the previous low and stop loss above the recent high.
16. Bullish Cup and Handle pattern
This chart pattern looks like a tea cup with a handle. It has a rounded bottom with handle-like pattern.
- What it means: it’s a signal of a strong uptrend breakout.
- How to Trade: take the trade when the price breaks the resistance level at the handle pattern. Keep your stop loss below the recent low and take profit above the previous high.
17. Bearish or inverted Cup and Handle pattern
This chart pattern looks like a tea cup with a handle in inverted form. It has a rounded top with handle-like pattern.
- What it means: it indicates a strong downtrend breakout.
- How to Trade: take the trade when the price breaks the support level at the handle pattern. Keep your stop loss above the recent high formed and take profit below the previous low.
18. Bullish Rectangle Pattern
This chart looks like consolidation before the trend continues. This pattern forms in a rectangular form, and the price consolidates in a range for a while and then gives a strong breakout in an uptrend.
- What it means: The trend will be continued after a strong breakout from the consolidation.
- How to Trade: Trade when the market gives a strong breakout at the resistance area. Keep your stop loss below the recent low and take profit above the previous high.
19. Bearish Rectangle Pattern
This chart is opposite of a bullish rectangular chart pattern. This pattern forms in a rectangular form, and the price consolidates in a range for a while and then gives a strong breakout in a downtrend.
- What it means: The trend will be continued after a strong breakout from the consolidation in a downtrend.
- How to Trade: Trade when the market gives a strong breakout at the support area. Keep your stop loss below the recent high and take profit below the previous low.
20. Descending Channel pattern
This chart pattern forms when the price continuously forms highs and lows in a downtrend.
- What it means: This is a signal that the downtrend will be continued and wait for a breakout.
- How to Trade: Buy when the price breaks through the resistance level. Keep your stop loss below the recent low and stop loss above the previous high.
21. Ascending or Rising Channel pattern
This chart pattern forms when the market continuously creates highs and lows in an uptrend.
- What it means: This indicates that the uptrend will be continued and wait when the price gives a breakout.
- How to Trade: Buy when the price breaks at the support level. Keep your stop loss above the recent high and take profit below the previous low.
Bilateral Trading Chart Patterns
Bilateral chart patterns can give a break out in either direction, making these patterns ideal for breakout traders.
22. Broadening Formation
This chart pattern looks like the price is touching the same trend line on either side.
- What it means: The Market can give a breakout on either side. Wait for strong breakout to get entry.
- How to Trade: Wait for the breakout after confirmation, take entry. Keep your stop loss at the recent low or high, and take profit at the previous high or low.
23. Bullish Diamond Chart Pattern
This chart pattern looks like a diamond, and it’s a rare but powerful reversal pattern in any currency pair.
- What it means: Can be a strong signal for reversal of the market.
- How to Trade: Wait for the breakout at the resistance area. Keep your stop loss above the recent high, and take profit below the recent low.
24. Bearish Diamond Chart Pattern
This pattern is the opposite of the bullish diamond pattern. This pattern indicates a strong uptrend reversal.
- What it means: Can be a strong signal for reversal of the market in an uptrend.
- How to Trade: Wait for the breakout at the resistance area. Keep your stop loss below the recent low and take profit above the previous high.
Advanced Patterns
For experienced traders, these patterns offer deeper insights into market behavior.
25. Butterfly or Bullish Gartley or Bat Chart Pattern
A harmonic or butterfly chart pattern in which retail traders use Fibonacci levels to take entry.
- What It Means: Signal of a potential trend reversal.
- How to Trade: Analyze the pattern and when the price reaches point D, wait for the breakout and take entry there.
26. Inverted Butterfly Or bearish Gartley Chart Pattern
Another harmonic pattern for reversals. This chart pattern was created in a down trend.
- What it means: indicates a strong reversal.
- How to Trade: Wait for the point D. When the market once touches that area, then wait for the breakout confirmation. Once the breakout is done, take entry directly over there.
27. Bullish And Bearish Bat Pattern
A similar harmonic pattern like Gartley, but in a bat chart pattern, we look at the point B retracement of the Fibonacci. Wait for the breakout at any direction and place trade.
- What it means: A strong reversal chart pattern.
- How to Trade: Trade in the direction of the trend, wait for the breakout and take entry it the breakout level.
Crypto, Stock and Forex Specific Trading Chart Patterns
Crypto, Stock, and forex markets have unique patterns due to their volatility.
28. Double Top Chart Pattern
A bearish reversal chart pattern is created mostly at its resistance point.
- What it means: A best indication and signal of the down trend.
- How to Trade: Sell when the market creates a double top and breaks the support level. Keep your stop loss at the top, and take profit below the previous low.
29. Double bottom Chart Pattern
A bullish reversal pattern forms mostly at the support level.
- What it means: A best signal for an uptrend.
- How to Trade: Buy when the market creates a double bottom and breaks the support level. Keep your stop loss at the bottom, and take profit above the previous high.
30. Triple Top Chart Pattern
A similar pattern like a double top, but in a triple top pattern, the market creates three tops.
- What it means: it’s a solid signal of the down trend.
- How to Trade: Sell when the market creates a triple top and breaks the support area. Keep your stop loss at the top of the pattern, and take profit below the previous low.
31. Triple bottom Chart Pattern
A similar chart pattern to a double bottom.
- What it means: Best sign for uptrend.
- How to Trade: Buy when the market creates a triple bottom and breaks the resistance level. Keep your stop loss at the low, and take profit above the previous high.
32. Head and Shoulders chart pattern
Best and easily identifiable pattern. Market create shoulder on both sides and head.
- What It Means: Signals for down trend reversal.
- How to Trade: Trade when the price gets a breakout of the support level. keep your stop loss above the recent high, and take profit below the previous low.
33. Inverse Head and Shoulders chart pattern
Opposite of head and shoulder pattern. Market create shoulder on both sides and head inversely.
- What It Means: Signals for down trend reversal.
- How to Trade: Trade when the price gets a breakout of the resistance level. Keep your stop loss below the recent low, and take profit above the previous high.
34. Triangle Chart Patterns
A reversal or continuation of the trend. This pattern is created in a triangle form.
- What It Means: The trend will likely continue after the breakout in a down or uptrend.
- How to Trade: Trade entry when the market gives a strong breakout.
How to Use Chart Patterns in Your Trading
- Identify the Pattern: Use your trading platform like Trading View to spot chart patterns.
- Confirm with Volume: Higher volume during a breakout increases in the market.
- Set Stop-Loss and Take-Profit Levels: Use the pattern structure if it’s bullish, set stop loss below the recent low, and take profit at the previous high.
- Back test Your Strategy: Test the chart pattern on Trading View, take notes and analyze the market. On a daily basis.
Final Thoughts on Trading Chart Patterns
Chart patterns are a powerful and effective strategy for beginner traders. By learning and practicing these 34 chart patterns, you’ll be better trained in 2025 and beyond. Whether you’re trading stocks, forex, or crypto, these patterns can help you make smarter, more informed decisions.
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