Chart Patterns

What are Chart Patterns?

In technical analysis, the distinctive formation created by the movement of security prices on a chart. It is identified by a line connecting common price points (closing prices, highs, lows) over a period of time. Chartists try to identify patterns to try to anticipate the future price direction.

Most common chart patterns:

Head and Shoulders

Wedge aka Symmetrical triangle

Bull/Bear Flag

Double top

Double bottom

Triple top/bottom

Cup and handle

Descending channel

Ascending channel

Chart patterns will by far be your most reliable friend when it comes to trading when combined with other indicators.