Chart Patterns Explained: Head and Shoulders, Triangles, Flags & More
Chart patterns are shapes that price forms over many candles as buyers and sellers push against each other. They help you frame a trade: where it triggers, where it's wrong, and where it might go.
Chart patterns are recognisable price shapes used to frame a breakout or reversal: triangles, flags, wedges, double tops and bottoms, and head and shoulders. They are a way to describe structure and place a stop, not a prediction, and they fail often enough that confirmation matters.
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Open the live chart →Reversal patterns
Head and shoulders
Three peaks, the middle one highest, with a "neckline" joining the lows between them. It suggests an uptrend is losing strength. The pattern is usually treated as confirmed when price closes below the neckline, and invalidated if price climbs back above the right shoulder. The inverse head and shoulders is the mirror image at the bottom of a downtrend.
Double top and double bottom
Two tests of the same high (double top) or low (double bottom) that fail to break through. Confirmation typically comes when price breaks the low between the two tops (or the high between two bottoms).
Continuation patterns
Flags and pennants
A sharp move (the "pole") followed by a small, tight pause that drifts against it. Traders watch for a break out of the pause in the direction of the pole.
Triangles
- Ascending: flat resistance, rising lows. Often resolves upward.
- Descending: flat support, falling highs. Often resolves downward.
- Symmetrical: converging highs and lows. Direction is less clear; wait for the break.
Wedges
Both lines slope the same way while converging. A rising wedge often precedes weakness; a falling wedge often precedes strength.
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Play free, no signup →Ranges
A range is price trapped between support and resistance. Many traders fade the edges (sell near the top, buy near the bottom) or wait for a decisive break. Watch for sweeps: a quick poke beyond the edge that snaps back inside is often a trap, not a breakout.
How to trade chart patterns sensibly
- Wait for confirmation, a close through the trigger level, not just a touch.
- Define the invalidation: the point where the pattern is clearly wrong. That's where the stop goes.
- Size from the stop with a lot size calculator.
- Expect failures. Patterns shift the odds; they don't guarantee anything. False breakouts are common, especially in quiet sessions.
Frequently asked questions
What is the most reliable chart pattern?
None is reliable on its own. Patterns that form at major levels, in line with the higher-timeframe trend and with a clean confirmation close, tend to be the most useful.
What's the difference between chart patterns and candlestick patterns?
Candlestick patterns are one to three candles. Chart patterns form over many candles and describe the bigger shape of price.
How do I avoid false breakouts?
Wait for a candle close beyond the level rather than an intra-candle poke, check the higher timeframe, and be cautious around quiet sessions and news spikes.
Where do I put my stop loss on a chart pattern?
At the point that invalidates the pattern, for example above the right shoulder on a head and shoulders, or back inside a range after a breakout.
Keep learning
Chart Bound is a free browser game that drills exactly this on real historical charts: read the candles, make the call, see instantly if you were right.
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