CHART PATTERNS

CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

• DOUBLE TOP & DOUBLE BOTTOM
• HEAD & SHOULDERS
• RISING & FALLING WEDGES
• BULLISH & BEARISH RECTANGLES
• BULLIS & BEARISH PENNANTS
• TRIANGLES
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE TOP
• A double top is a reversal pattern that is formed
after there is an extended move up.
• The “tops” are peaks which are formed when the
price hits a certain level that can’t be broken.
• After hitting this level, the price will bounce off it
slightly, but then return back to test the level again.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE TOP
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE TOP
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE BOTTOM
• The double bottom is also a trend reversal
formation, but this time we are looking to go long
instead of short.
• These formations occur after extended
downtrends when two valleys or “bottoms” have
been formed.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE BOTTOM
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DOUBLE BOTTOM
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 HEAD & SHOULDER
• The head and shoulders chart pattern is a reversal
pattern and most often seen in uptrends.
• It is formed by a peak (shoulder), followed by
a higher peak (head), and then another lower
peak (shoulder).
• A “neckline” is drawn by connecting the lowest
points of the two troughs.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 HEAD & SHOULDER
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 HEAD & SHOULDER
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 INVERSE HEAD & SHOULDER
• The name speaks for itself. It is basically a head
and shoulders formation, except this time it’s
upside down.
• A valley is formed (shoulder), followed by an even
lower valley (head), and then another higher
valley (shoulder). These formations occur after
extended downward movements.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 INVERSE HEAD & SHOULDER
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 INVERSE HEAD & SHOULDER
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RISING WEDGE
• A rising wedge is formed when price consolidates
between upward sloping support and resistance
lines.
• The slope of the support line is steeper than that
of the resistance.
• This indicates that higher lows are being formed
faster than higher highs.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RISING WEDGE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RISING WEDGE
EX. 1
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RISING WEDGE
EX. 2
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RISING WEDGE
EX. 2
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 FALLING WEDGE
• The falling wedge can either be a reversal or
continuation signal.
• As a reversal signal, it is formed at a bottom of a
downtrend, indicating an uptrend would come
next.
• As a continuation signal, it is formed during an
uptrend, implying that the upward price action
would resume.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 FALLING WEDGE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 FALLING WEDGE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 FALLING WEDGE
EX. 1
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RECTANGLE
• A rectangle is a chart pattern formed when price is
bounded by parallel support and resistance levels.
• A rectangle exhibits a period of consolidation or
indecision between buyers and sellers but neither has
taken over.
• The price will “test” the support and resistance levels
several times before eventually breaking out.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 RECTANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BEARISH RECTANGLE
• A bearish rectangle is formed when the price
consolidates for a while during a downtrend.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BEARISH RECTANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BULLISH RECTANGLE
• A bullish rectangle is formed when the price
consolidates for a while during an uptrend.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BULLISH RECTANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 PENNANTS
• Like rectangles, pennants are continuation chart
patterns formed after strong moves.
• A pennant exhibits a period of consolidation or
indecision between buyers and sellers before taking
the pair further in the same direction.
• Because of this, the price usually consolidates and
forms a tiny symmetrical triangle, which is called a
pennant.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 PENNANT
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BEARISH PENNANT
• A bearish pennant is formed during a steep, almost
vertical, downtrend.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BEARISH PENNANT
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BULLISH PENNANT
• A bullish pennant is formed during a steep, almost
vertical, uptrend.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 BULLISH PENNANT
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 TRIANGLES
• A triangle chart pattern involves price moving into a
tighter and tighter range as time goes by and provides
a visual display of a battle between bulls and bears.
• A triangle pattern is generally considered to be
forming when it includes at least five touches of
support and resistance.
• The triangle pattern is generally categorized as a
“continuation pattern”.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 THREE TYPES OF TRIANGLES
• SYMMETRICAL TRIANGLE
• ASCENDING TRIANGLE
• DESCENDING TRIANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 SYMMETRICAL TRIANGLE
• A symmetrical triangle is a chart formation where the
slope of the price’s highs and the slope of the price’s
lows converge together to a point where it looks like a
triangle.
• This is also a type of consolidation.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 SYMMETRICAL TRIANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 SYMMETRICAL TRIANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 ASCENDING TRIANGLE
• An ascending triangle chart pattern that occurs when
there is a resistance level and a slope of higher lows.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 ASCENDING TRIANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DESCENDING TRIANGLE
• Descending Triangles are the exact opposite of
ascending triangles.
• In a descending triangle chart pattern there is a string
of lower highs which forms the upper line. The lower
line is a support level in which the price cannot seem
to break.
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DESCENDING TRIANGLE
 CHART PATTERNS

BASIC CHART PATTERNS AND FORMATIONS

 DESCENDING TRIANGLE
 CHART PATTERNS

THREE MAIN GROUP OF CHART PATTERNS

 REVERSAL CHART PATTERNS
 CHART PATTERNS

THREE MAIN GROUP OF CHART PATTERNS

 REVERSAL CHART PATTERNS
 CHART PATTERNS

THREE MAIN GROUP OF CHART PATTERNS

 CONTINUATION CHART PATTERNS
 CHART PATTERNS

THREE MAIN GROUP OF CHART PATTERNS

 CONTINUATION CHART PATTERNS
 CHART PATTERNS

THREE MAIN GROUP OF CHART PATTERNS

 BILATERAL CHART PATTERNS
 CHART PATTERNS

CHART PATTERNS CHEAT SHEET

PATTERN FORMS DURING SIGNAL NEXT MOVE

Double Top Uptrend Reversal Down

Double Bottom Downtrend Reversal Up

Head and
Uptrend Reversal Down
Shoulders

Inverse Head and

Downtrend Reversal Up
Shoulders
 CHART PATTERNS

CHART PATTERNS CHEAT SHEET

PATTERN FORMS DURING SIGNAL NEXT MOVE

Rising Wedge Downtrend Continuation Down

Rising Wedge Uptrend Reversal Down

Falling Wedge Downtrend Reversal Up

Falling Wedge Uptrend Continuation Up

 CHART PATTERNS

CHART PATTERNS CHEAT SHEET

PATTERN FORMS DURING SIGNAL NEXT MOVE

Bearish Rectangle Downtrend Continuation Down

Bullish Rectangle Uptrend Continuation Up

Bearish Pennant Downtrend Continuation Down

Bullish Pennant Uptrend Continuation Up

DISCUSSION
END