Reference · Chart structure
Chart patterns: a cheat sheet of 16 common patterns
Every common chart pattern on one page: what each looks like, how it's conventionally read, and the point where it stops describing price. Each pattern has a simple diagram. The dashed lines are the boundaries that matter; the solid line is an invented price path.
Three rules before you trust any pattern
- Use closed candles. A pattern drawn on a candle that is still moving can disappear before it closes.
- Decide invalidation first. Know which close would mean the pattern no longer describes price before you decide what it means.
- State the timeframe. A flag on 15-minute candles may be invisible on 4-hour candles.
Continuation patterns
A sharp move, then a pause. Textbooks read the pause as a rest before the earlier move resumes. Often it doesn't.
Bull flag
A sharp rise (the pole), then a short pause between parallel lines drifting slightly down.
Reading
Conventionally bullish continuation.Invalidated by
A close below the flag's low.Bear flag
A sharp fall, then a short pause between parallel lines drifting slightly up.
Reading
Conventionally bearish continuation.Invalidated by
A close above the flag's high.Bull pennant
A sharp rise, then a small triangle whose lines converge.
Reading
Conventionally bullish continuation.Invalidated by
A close below the pennant's lower line.Bear pennant
A sharp fall, then a small converging triangle.
Reading
Conventionally bearish continuation.Invalidated by
A close above the pennant's upper line.Cup and handle
A rounded dip back up to an earlier high (the cup), then a small, shallow pullback (the handle).
Reading
Conventionally bullish.Invalidated by
The handle falling into the lower half of the cup.
Reversal patterns
Shapes that are said to mark the end of a move. The key line in each is the neckline or support it eventually needs to break.
Double top
Two highs at about the same level, with a dip (the neckline) between them.
Reading
Conventionally bearish once price closes below the neckline.Invalidated by
A close above the two highs.Double bottom
Two lows at about the same level, with a rise between them.
Reading
Conventionally bullish once price closes above the neckline.Invalidated by
A close below the two lows.Head and shoulders
Three highs, the middle one highest, sitting on a neckline.
Reading
Conventionally bearish once price closes below the neckline.Invalidated by
A close above the right shoulder.Inverse head and shoulders
Three lows, the middle one lowest, beneath a neckline.
Reading
Conventionally bullish once price closes above the neckline.Invalidated by
A close below the right shoulder.
Triangles and wedges
Ranges that narrow as two lines converge. Which way price leaves, if it leaves cleanly at all, is the whole question.
Ascending triangle
A flat ceiling above a rising floor of higher lows.
Reading
Conventionally bullish.Invalidated by
A close below the rising lower line.Descending triangle
A flat floor beneath a falling ceiling of lower highs.
Reading
Conventionally bearish.Invalidated by
A close above the falling upper line.Symmetrical triangle
Lower highs and higher lows converging on a point.
Reading
No conventional direction: it's read from the break.Invalidated by
Price drifting past the apex without a clean break.Rising wedge
Two rising lines converging, the lower one steeper.
Reading
Conventionally bearish.Invalidated by
A close above the upper line.Falling wedge
Two falling lines converging, the upper one steeper.
Reading
Conventionally bullish.Invalidated by
A close below the lower line.
Ranges and channels
Price moving between two parallel lines. They describe where price has been contained, not where it will go.
Parallel channel
Price swinging between two parallel lines, sloping up, down or flat.
Reading
Describes containment; no direction implied beyond the slope.Invalidated by
A close outside either line.Range breakout
A flat range with repeated touches at the top and bottom, then a close outside it.
Reading
Read from the side it breaks.Invalidated by
A close back inside the range.
Why patterns fail
- False breakouts: price closes beyond a boundary, then returns inside it.
- Breaks the other way: a "bullish" shape exits downwards, or a "bearish" one upwards.
- The shape dissolves: price drifts on until the lines stop meaning anything.
- News: scheduled releases can move price straight through any line. See how to read an economic calendar.
- Hindsight: finished patterns look obvious; forming ones don't, and textbook examples are chosen because they worked.
Study the patterns in FXPatternLab
FXPatternLab is an educational chart-study app for 10 major FX pairs. It has 21 illustrated pattern lessons with quick checks: the 16 patterns above, plus triple tops and bottoms, the inverse cup and handle and harmonic AB=CD structures, which the app labels as research-only. Its detector draws structures on completed 15M, 1H and 4H candles, and recorded cases, including failures, can be studied from formation to result. It doesn't place trades and gives no instructions to trade.
FXPatternLab is free to start, with two pairs on 1H, and Member subscriptions unlock all pairs and timeframes. There's no free trial. Available on Google Play; iOS coming soon. About FXPatternLab
Further reading
- Ascending triangle pattern: identification, invalidation and limitations
- Bull flag and bear flag patterns
- Manual chart drawings versus detected patterns
- Pattern case review sheet (printable)
Educational content only, not financial advice.