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Written by Nathalie Okde
Fact checked by Rania Gule
Updated 11 December 2025
Table of Contents
Chart patterns visually represent the price movements, helping you understand and analyze market trends. You must understand the most common chart patterns to make more informed trading decisions.
A chart pattern is a distinct formation on a stock chart that creates a trading signal or a sign of future price movements. It’s like a roadmap that helps you understand where a stock might be headed based on its past movements.
Let's dive deeper to explore the top 45 chart patterns that will be most useful for traders in 2026.
Key Takeaways
The main purpose of trading chart patterns is to identify if a trend will continue or reverse, helping you make informed decisions.
Always wait for a confirmed price breakout before trusting any chart pattern; this is the most crucial rule to avoid false signals.
For a reliable signal, a breakout from a chart pattern must be supported by a significant surge in trading volume.
To improve accuracy, combine these chart patterns with other technical analysis tools, like the RSI, to confirm entry and exit points.
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Chart patterns are visual formations created by the price movements of an asset on a trading chart.
These chart patterns are essential tools in technical analysis, helping you predict future market behavior based on historical price action.
Across markets like stocks, forex, and crypto, chart patterns help traders identify potential breakouts, reversals, or continuation trends.
Learning to read chart patterns is easier when you follow clear steps. Use this simple approach:
1. Identify the Trend
Check whether the market is moving up, down, or sideways.
Uptrend → Buyers are in control.
Downtrend → Sellers are dominant.
2. Spot the Pattern
Look for basic shapes like triangles, flags, or head and shoulders.
These patterns hint at whether the trend may continue or reverse.
3. Mark Support and Resistance
Support = Where buyers often step in.
Resistance = Where sellers usually take profit. Watching how the price reacts near these levels helps you plan better entries and exits.
There are several types of chart patterns traders use to interpret price action and forecast market movements.
Reversal patterns signal a potential change in the direction of an existing trend. They indicate that the prevailing momentum, bullish or bearish, is losing strength and may soon reverse.
Continuation patterns suggest that the current trend is likely to persist after a brief pause or consolidation.
These types of chart patterns reflect temporary indecision before the market resumes its previous direction. Popular examples include:
Bilateral patterns represent periods of market indecision where prices could break out in either direction, upward or downward.
This chart pattern type reflects balanced pressure between buyers and sellers, and the breakout direction determines the next major move.
Complex patterns are advanced types of chart patterns that capture multi-phase or cyclical market behavior. They often rely on mathematical ratios or wave structures to predict long-term price movements.
Below is a curated list of the top 45 chart patterns, essential for both beginner and advanced traders to learn in 2026.
Pattern Name
Reliability (1–10)
Signal Type
Best Timeframe
Confirmation Needed
Risk Level
Ascending Triangle Chart Pattern
8/10
Continuation (Bullish)
4H-Daily
Yes
Medium
Descending Triangle Chart Pattern
Continuation (Bearish)
Symmetrical Triangle Chart Pattern
7/10
Bilateral
1H-Daily
Pennant Chart Pattern
9/10
Continuation
1H-4H
Low
Bullish Flag Chart Pattern
Bearish Flag Chart Pattern
Rising Wedge Chart Pattern
Reversal (Bearish)
Falling Wedge Chart Pattern
Reversal (Bullish)
Double Bottom Chart Pattern
4H-Weekly
Yesneckline
Double Top Chart Pattern
Head and Shoulders Chart Pattern
10/10
Inverse Head and Shoulders Pattern
Rounding Top Chart Pattern
Daily-Weekly
Rounding Bottom Chart Pattern
Cup and Handle Chart Pattern
Bump and Run Chart Pattern
Reversal
Price Channel Chart Pattern
Optional
Triple Top Chart Pattern
Triple Bottom Chart Pattern
Diamond Top Chart Pattern
Diamond Bottom Chart Pattern
Channel Chart Patterns
No
Gaps Chart Patterns
Continuation/Reversal
All
High
Bullish Rectangle Chart Pattern
Bearish Rectangle Chart Pattern
Pipe Top Chart Pattern
6/10
Pipe Bottom Chart Pattern
Spikes Stock Chart Pattern
5/10
Reversal/Continuation
Intraday
Very High
Ascending Staircase Chart Pattern
Descending Staircase Chart Pattern
Megaphone Stock Chart Pattern
Bilateral/Reversal
V Chart Pattern
Harmonic Chart Pattern
Elliott Wave Chart Pattern
Cyclical/Continuation
Three Drives Chart Pattern
Reversal (Harmonic)
Quasimodo Chart Pattern
Dead Cat Bounce Chart Pattern
Island Reversal Chart Pattern
Tower Top Chart Pattern
Tower Bottom Chart Pattern
Shakeout Chart Pattern
Broadening Wedge Pattern (Expanding Triangle)
Parabolic Curve Pattern
Bullish Wolfe Wave
Bearish Wolfe
An ascending triangle pattern is a bullish continuation pattern characterized by a horizontal resistance line and a rising support line.
This chart pattern indicates buyers are becoming more aggressive, pushing the price higher and eventually breaking through the resistance level.
Reliability: 8/10
Best Timeframe: 4H–Daily
Confirmation Needed: Yes, breakout above resistance with volume
Risk Level: Medium
A descending triangle pattern is a bearish continuation pattern with a horizontal support line and a falling resistance line.
This pattern suggests that sellers are becoming more aggressive, pushing the price lower and eventually breaking through the support level.
Confirmation Needed: Yes, breakdown with high volume
A symmetrical triangle can signal either a continuation or a reversal, with converging trend lines indicating a period of consolidation.
The chart pattern forms when the price makes lower highs and higher lows, converging towards a point. The breakout direction from the triangle determines whether the trend will continue or reverse, often accompanied by a surge in volume.
Reliability: 7/10
Best Timeframe: 1H-Daily
Confirmation Needed: Yes, breakout direction validation
Pennant patterns are short-term continuation stock chart patterns that resemble small symmetrical triangles.
They form after a strong price movement, known as the flagpole, and indicate a brief consolidation period before the trend resumes. Pennants are characterized by converging trend lines and typically result in a breakout in the direction of the prior trend.
Reliability: 9/10
Best Timeframe: 1H-4H
Confirmation Needed: Yes, breakout along trend direction
Risk Level: Low
Flag patterns are small rectangular continuation patterns that slope against the prevailing trend.
They form after a sharp price movement, indicating a brief period of consolidation before the trend continues. The slope of the flag is usually in the opposite direction of the trend, and the breakout from the flag is often accompanied by increased volume.
Confirmation Needed: Yes, breakout above upper flag boundary
A bear flag is a continuation pattern that indicates a pause in a downtrend followed by a further decline. It forms after a sharp price drop, known as the flagpole, and is characterized by a rectangular shape where the price consolidates, moving slightly upward or sideways.
This consolidation represents a brief period of indecision in the market, where buyers and sellers are temporarily in equilibrium.
Confirmation Needed: Yes, breakdown below flag base
Wedge patterns are sloping stock chart patterns that signal a continuation or a reversal. A rising wedge typically indicates a bearish reversal.
The wedge's converging trend lines show a slowdown in momentum, and the breakout direction indicates a trend change.
Best Timeframe: 4H-Daily
Confirmation Needed: Yes, breakdown confirmation
The falling wedge pattern is a bullish reversal pattern that signals a downtrend's end and an uptrend's beginning.
The pattern forms when the price makes lower highs and lower lows within converging trend lines. The breakout above the upper trend line indicates that the bearish momentum is slowing down, and a bullish reversal is likely.
Confirmation Needed: Yes, breakout above resistance
A double bottom pattern is a bullish reversal pattern resembling the letter "W." It forms when the price hits a support level twice, with a moderate pullback in between.
The pattern indicates that the downtrend is reversing, and an uptrend is likely. The breakout above the resistance level formed by the intermediate peak confirms the reversal.
Best Timeframe: 4H-Weekly
Confirmation Needed: Yes, neckline breakout
A double top pattern is a bearish reversal pattern shaped like the letter "M." It forms when the price hits a resistance level twice, with a moderate decline in between.
This pattern signals that the uptrend is reversing, and a downtrend is expected. The breakdown below the support level formed by the intermediate trough confirms the reversal.
Confirmation Needed: Yes, breakdown below neckline
The head and shoulders pattern is a bearish reversal pattern that signals a shift from an uptrend to a downtrend. It features three peaks: a higher peak (head) between two lower peaks (shoulders).
The stock chart pattern is completed when the price falls below the neckline, a support line connecting the lows of the two troughs. This breakdown is often accompanied by increased volume, confirming the trend reversal.
Reliability: 10/10
The inverse head and shoulders is a bullish reversal pattern that signals a shift from a downtrend to an uptrend. It features three troughs: a lower trough (head) between two higher troughs (shoulders).
The pattern is completed when the price rises above the neckline, a resistance line connecting the highs of the two peaks. This breakout is often accompanied by increased volume, confirming the trend reversal.
Confirmation Needed: Yes, breakout above neckline
Rounding tops are long-term reversal patterns that resemble a "U" shape. A rounding top signals a gradual shift from bullish to bearish.
These trading chart patterns form over an extended period, reflecting a slow but steady change in market sentiment. The breakout from the pattern confirms the trend reversal.
Best Timeframe: Daily-Weekly
A rounding bottom is a bullish reversal pattern that indicates a gradual shift from a downtrend to an uptrend. It resembles a "U" shape and suggests a slow but steady accumulation phase before the price rises.
The breakout above the resistance level formed by the rounding bottom confirms the trend reversal.
The cup and handle pattern is a bullish continuation pattern where a rounded bottom (the cup) is followed by a consolidation period (the handle).
The handle typically slopes downwards, indicating a brief pullback before the trend resumes. The breakout above the resistance level formed by the cup's rim confirms the continuation of the prior uptrend.
Confirmation Needed: Yes, breakout above handle resistance
The bump and run pattern is a reversal pattern that starts with a sharp rise or fall (the bump), followed by a gradual trend (the run) before reversing.
This trading chart pattern suggests an unsustainable trend that is likely to reverse. The reversal is confirmed when the price breaks through the trend line formed during the run phase, often accompanied by increased volume.
Confirmation Needed: Yes, trendline break with volume
Price channels are continuation patterns formed by parallel trend lines. They indicate that the price is likely to continue moving within the channel.
The breakout from the channel can signal significant trend changes. An upward channel suggests a bullish trend (bull market), while a downward channel indicates a bearish trend (bear market).
Confirmation Needed: Optional, channel breakout
A triple top pattern is a bearish reversal pattern that forms after three peaks at approximately the same level.
These trading chart patterns signal the end of an uptrend and the beginning of a downtrend. The breakdown below the support level formed by the lows between the peaks confirms the trend reversal, often accompanied by increased volume.
A triple bottom pattern is a bullish reversal chart pattern that forms after three troughs at approximately the same level.
It indicates the end of a downtrend and the beginning of an uptrend. The breakout above the resistance level formed by the highs between the troughs confirms the trend reversal, often accompanied by increased volume.
Confirmation Needed: Yes, breakout confirmation
A diamond top is a bearish reversal stock pattern that develops after an uptrend. This pattern is characterized by price movement that first broadens out and then contracts, forming a diamond shape on the chart.
The diamond top pattern typically signals growing uncertainty in the market and a potential shift from bullish to bearish sentiment.
The trend reversal is confirmed when the price breaks below the lower boundary of the diamond, often accompanied by an increase in trading volume and volatility.
Confirmation Needed: Yes, breakdown below lower boundary
A diamond bottom, the opposite of the diamond top, is a bullish reversal chart pattern that appears after a downtrend. This pattern is marked by an initial expansion and followed by a contraction in price movement, creating a diamond-like shape.
This trading pattern indicates a possible transition from bearish to bullish sentiment, signaling the end of the downtrend.
The trend reversal is confirmed when the price breaks above the upper boundary of the diamond, often accompanied by a surge in volume and volatility.
Confirmation Needed: Yes, breakout with volume
Channel patterns are continuation patterns that form when a stock’s price oscillates between two parallel trendlines.
They can slope upwards (bullish channel), downwards (bearish channel), or remain horizontal (neutral channel).
Channel patterns represent periods of consistent price movement within a range, providing traders with opportunities to trade between support and resistance levels.
Breakouts from the channel often signal significant trend changes or continuations.
Confirmation Needed: Optional, breakout beyond channel
Gaps patterns occur when a stock's price makes a sharp move up or down, leaving a gap between the closing price of one period and the opening price of the next.
They are categorized into three types:
Breakaway gaps, which mark the start of a trend
Runaway gaps, which occur within a strong trend
Exhaustion gaps, signaling the end of a trend
Gaps reflect strong market sentiment and are often confirmed by increased trading volume.
Best Timeframe: All timeframes
Confirmation Needed: Yes, volume validation
Risk Level: High
Bullish rectangle patterns are continuation patterns that form during an uptrend as the price consolidates between horizontal support and resistance levels.
This pattern signifies a pause in the trend, where buyers and sellers are in equilibrium. Once the price breaks above the resistance, it indicates the resumption of the prior uptrend.
Confirmation Needed: Yes, breakout above range
Bearish rectangle patterns are continuation patterns that occur during a downtrend when the price consolidates between horizontal support and resistance levels.
This pattern reflects a temporary balance between buyers and sellers. A breakout below the support level signals the continuation of the prior downtrend.
Confirmation Needed: Yes, breakdown below support
The pipe top pattern is a bearish reversal pattern characterized by two tall candlesticks at approximately the same price level, followed by a significant downward movement.
This trading pattern typically appears at the peak of an uptrend and indicates that the trend is losing momentum, with sellers starting to dominate.
Reliability: 6/10
Confirmation Needed: Yes, bearish close below pattern
The pipe bottom pattern is a bullish reversal pattern characterized by two tall candlesticks at approximately the same price level, followed by a significant upward movement.
This pattern often forms at the end of a downtrend and signals that buyers are regaining control, leading to a potential trend reversal.
Confirmation Needed: Yes, bullish close above pattern
Spikes patterns represent sudden, sharp price movements that stand out on a chart due to their extreme height compared to surrounding price action.
They are often driven by market news or significant events, reflecting high volatility. Spikes can indicate either a reversal or continuation, depending on subsequent price action.
Reliability: 5/10
Best Timeframe: Intraday-1H
Confirmation Needed: Yes, next candle direction
Risk Level: Very High
Ascending staircase patterns are bullish continuation patterns where the price forms a series of higher highs and higher lows, resembling a staircase.
This pattern signifies steady upward momentum, with buyers consistently stepping in at higher support levels.
Confirmation Needed: Optional, trendline confirmation
Descending staircase patterns are bearish continuation patterns characterized by a series of lower highs and lower lows, resembling a downward staircase.
This trading pattern reflects sustained selling pressure, with sellers dominating and pushing the price to lower levels.
Megaphone patterns, also known as broadening formations, are characterized by increasing price volatility, forming a shape where the trendlines diverge outward.
They can indicate either a continuation or reversal, depending on the breakout direction. This pattern reflects growing uncertainty and heightened trading activity.
Confirmation Needed: Yes, breakout direction confirmation
The V pattern is a sharp reversal pattern characterized by a steep decline followed by an equally sharp recovery, forming a “V” shape on the chart.
This pattern signals a swift change in market sentiment, with strong buying pressure following intense selling.
Confirmation Needed: Yes, momentum confirmation
Harmonic patterns are complex chart formations based on Fibonacci ratios, such as 0.618 or 1.272, to predict price movements.
These patterns, like the Bat, Gartley, and Butterfly, indicate precise reversal points and are used to anticipate major price swings.
Confirmation Needed: Yes, fibonacci and price action alignment
The Elliott wave pattern is a cyclical pattern that identifies market trends through five impulsive waves and three corrective waves.
It reflects market psychology, showing the progression of optimism and pessimism through repeated cycles. Traders use it to forecast market direction and potential reversal points.
Confirmation Needed: Yes, wave count validation
The three drives pattern is a harmonic reversal pattern characterized by three consecutive price swings in the same direction, with each drive completing at specific Fibonacci levels.
This pattern signals that the prevailing trend is likely to reverse after the third drive.
Confirmation Needed: Yes, completion of third drive
The Quasimodo pattern is a reversal pattern that forms when the price makes a higher high or lower low, followed by a return to the prior range.
This pattern signifies a trend reversal and highlights areas where traders can anticipate significant price movement.
Confirmation Needed: Yes, break of structure
The dead cat bounce pattern is a bearish continuation pattern where a temporary recovery occurs after a steep decline, only for the price to resume its downward trend.
This trading pattern reflects weak buying interest and signals that the prevailing downtrend is likely to continue.
Confirmation Needed: Yes, failure to sustain rally
An Island Reversal is a rare reversal pattern that forms when a group of price bars becomes isolated due to gaps on both sides.
This pattern signals a significant change in market sentiment.
This stock chart pattern suggests that the prevailing trend is losing momentum, leading to a sharp price reversal once the market gaps in the opposite direction.
Confirmation Needed: Yes, gap confirmation
The Tower Top Pattern is a bearish reversal pattern that forms after a strong uptrend, resembling a tower-like structure where price climbs rapidly before a sharp decline.
This stock chart pattern indicates that bullish momentum is fading and sellers are taking control. A breakdown below the support zone confirms a bearish trend reversal.
Confirmation Needed: Yes, breakdown from base
The Tower Bottom Pattern is the bullish counterpart of the Tower Top Pattern. It forms after a strong downtrend when the price stabilizes and gradually recovers.
This stock chart pattern suggests that selling pressure is weakening, and a bullish reversal is likely. A breakout above resistance confirms the shift in trend.
A Shakeout Pattern occurs when price briefly moves below a key support level, triggering stop-loss orders, before quickly reversing upward.
This trading chart pattern suggests that weak hands have been forced out, allowing larger investors to accumulate shares before a strong rally.
Confirmation Needed: Yes, volume spike and strong recovery
The Broadening Wedge, also called the expanding triangle, forms when price action becomes increasingly volatile, creating diverging trendlines.
Unlike symmetrical triangles, this pattern does not tighten. Instead, it shows progressively wider price swings.
Eventually, the price breaks out from the pattern, often in the opposite direction of the last swing.
The breakout can signal either a continuation or reversal depending on the overall trend and volume behavior during the breakout.
The Parabolic Curve pattern forms when price accelerates upwards at an increasing rate, creating a steep, curved trajectory that resembles a parabolic arc.
This pattern reflects extreme bullish sentiment and often occurs during strong market rallies fueled by speculative buying.
However, once the price reaches unsustainable levels, a sharp reversal or correction usually follows as profit-taking and market saturation occur.
Confirmation Needed: Yes, breakdown after peak
The Bullish Wolfe Wave appears after a downtrend, forming five precise waves that signal declining selling pressure.
Once the fifth wave touches or slightly breaks below the lower trendline, a bullish reversal is expected.
Traders aim for the "EPA" line drawn from point 1 to point 4 as the target, anticipating a sharp upward move.
Confirmation Needed: Yes, wave 5 completion and breakout
The Bearish Wolfe Wave forms after an uptrend with five structured waves showing slowing bullish momentum.
Upon completing wave 5, usually above the upper trendline, a bearish reversal typically follows. The price is expected to decline toward the "EPA" line, forecasting a quick move downward.
Confirmation Needed: Yes, wave 5 confirmation and breakdown
Chart patterns are fundamental for navigating the 2026 markets. These trading chart patterns provide a critical framework for interpreting market psychology and price action.
The true value of any chart pattern is realized through disciplined application. For high-probability setups, always confirm these chart patterns with other technical analysis tools and strict risk management.
By consistently applying this chart pattern methodology, you can execute trades with greater precision. This systematic approach to trading chart patterns is key to enhancing your strategy and achieving your financial objectives.
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While no pattern is perfect, the Head and Shoulders is renowned for its reliability in signaling trend reversals. Its accuracy increases significantly when confirmed by high trading volume.
Beginners should start with Double Top/Bottom and Flags. These patterns are relatively easy to spot and provide clear signals for both reversals and trend continuations.
First, wait for a decisive price breakout from the pattern's boundary. Then, enter the trade and place a stop-loss order just inside the opposite side of the pattern to manage risk.
Yes. Day traders frequently use short-term patterns like Flags, Pennants, and Triangles on lower timeframes. These help identify quick, scalpable market moves throughout the session.
The two primary categories are Reversal (signaling a trend change) and Continuation (indicating a trend pause). Bilateral patterns like triangles can signal a move in either direction.
The most common reason is a false breakout, where price breaks a level but then reverses. This often occurs due to low trading volume or a lack of broader market support for the move.
Nathalie Okde
SEO Content Writer
Nathalie Okde is an SEO content writer with nearly two years of experience, specializing in educational finance and trading content. Nathalie combines analytical thinking with a passion for writing to make complex financial topics accessible and engaging for readers.
Rania Gule
Market Analyst
A market analyst and member of the Research Team for the Arab region at XS.com, with diplomas in business management and market economics. Since 2006, she has specialized in technical, fundamental, and economic analysis of financial markets. Known for her economic reports and analyses, she covers financial assets, market news, and company evaluations. She has managed finance departments in brokerage firms, supervised master's theses, and developed professional analysis tools.
This written/visual material is comprised of personal opinions and ideas and may not reflect those of the Company. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. XS, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same. Our platform may not offer all the products or services mentioned.
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