Technical Analysis
Chart Patterns Every Trader Should Know
The 12 most reliable chart patterns used by professional traders, with formation rules, entry signals, stop placement, and targets. Every pattern tagged with category, direction, and reliability score.
Quick answer
The most reliable chart patterns for trend reversals are head and shoulders, double top/bottom, and inverse head and shoulders. For continuations, the bull/bear flag, ascending triangle, and cup and handle patterns have historically performed best. All patterns require confirmation via a break of their neckline or trendline before triggering an entry.
Reversal patterns
Signal the end of an existing trend and the start of a new one in the opposite direction.
Head and Shoulders
Three-peak formation that marks the end of an uptrend and the start of a downtrend. One of the most reliable reversal patterns in technical analysis.
Inverse Head and Shoulders
Mirror image of the head and shoulders pattern. Forms at the end of a downtrend and signals a bullish reversal.
Double Top
A resistance level tested twice without breaking, signaling the end of an uptrend. Looks like an "M" on the chart.
Double Bottom
Two troughs at similar support levels followed by a break above the intermediate peak. Looks like a "W" on the chart.
Rising Wedge
Price grinds higher between two upward-sloping trendlines that converge. Typically breaks downward.
Falling Wedge
Price grinds lower between two downward-sloping trendlines that converge. Typically breaks upward.
Continuation patterns
Form during established trends and signal a likely resumption of the prior move.
Ascending Triangle
A flat resistance with rising support below. Typically breaks upward in an existing uptrend.
Descending Triangle
Flat support with falling resistance above. Usually breaks downward in a prevailing downtrend.
Bull Flag
A sharp rally (the pole) followed by a tight, downward-sloping consolidation (the flag). Breaks higher to continue the rally.
Bear Flag
Mirror image of a bull flag. Sharp decline (pole) followed by an upward-sloping consolidation (flag). Breaks downward.
Cup and Handle
A rounded base (the cup) followed by a shallow pullback (the handle), then a breakout to new highs. A William O'Neil classic.
Bilateral patterns
Can resolve in either direction — wait for the break before committing.