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Topic
Chart patterns
18 guides in Finabase Learn
- Bear trap A false breakdown below support that lures traders into selling short just before price reverses higher.
- Breakout A move of price through a support or resistance level or out of a chart pattern, often watched for a pickup in volume.
- Bull trap A false breakout above resistance that draws in buyers just before price turns back down.
- Chart pattern A recognizable shape in price action, such as a head and shoulders or a triangle, that traders read for continuation or reversal.
- Consolidation A period in which price trades sideways in a range, pausing after a move while buyers and sellers reach balance.
- Cup and handle pattern: shape, buy point and how often it works How a cup with handle forms, the guidelines William O’Neil popularized for its depth, length and handle, where the breakout is, and what 31 real cups did next.
- Double Bottom A bullish reversal pattern of two troughs at about the same price, completed when price rises above the peak between them.
- Double Top A bearish reversal pattern of two peaks at about the same price, completed when price falls below the trough between them.
- Double top and double bottom patterns: rules, targets and examples How to recognize a double top or double bottom, where confirmation comes, how to project the target, and how 111 real cases on US stocks played out.
- Flags and pennants: trading the pause after a sharp move How bull and bear flags and pennants form after a steep pole, how to measure the target, and how 66 real flags on large US stocks actually performed.
- Head and shoulders A reversal chart pattern of three peaks, the middle one highest, with a neckline whose break completes the pattern.
- Head and shoulders pattern: neckline, target and reliability How to spot a head and shoulders top or inverse bottom, draw the neckline, project the measured-move target, and what real occurrences on US stocks did next.
- Price gap A space on a chart where a bar opens above the prior high or below the prior low, leaving a range where no trading occurred.
- Rectangle chart pattern: trading ranges, breakouts and targets How to identify a rectangle (trading range), why it has no built-in direction, how to measure the breakout target, and real rectangles that broke up, down and failed.
- Rising and falling wedge patterns: how to read and trade them How to tell a rising wedge from a falling wedge and from a triangle or channel, where the breakout and target are, and real wedges that broke both ways.
- Trend reversal A change in the direction of a price trend, from up to down or down to up, as opposed to a temporary pullback within the trend.
- Triangle chart patterns: ascending, descending and symmetrical How to draw ascending, descending and symmetrical triangles, where the breakout and target are, and why real triangles often break the "wrong" way.
- Triple top and triple bottom: how to trade three tests of a level What a triple top or triple bottom is, why the confirmation level is the lowest valley or highest peak, how to set the target, and real wins and failures.
Educational content, not investment advice. Finabase Learn explains how markets and tools work. It does not recommend any security or strategy, and examples are for illustration only. Investing involves risk, including the loss of principal. Rules and figures are for the United States unless stated and can change — check the cited source before you act.