Charting Patterns (Macro) (1 of 4)

PATTERN STAGES AND TYPES

Four Stages to a Pattern
Pattern Trend

1. Trend Breakout
Breakout
2. Pattern
3. Breakout Trend Trend Pattern
4. Trend Trend

Reversal Pattern

Two Types of Uptrend

Pattern

1. Reversal Downtrend
2. Continuation Uptrend Continuation Pattern
Uptrend

REVERSAL PATTERNS
NAME DESCRIPTION DIAGRAM

 A reversal pattern at the top of an

uptrend.
 Price forms two swing highs at
approximately the same price
DOUBLE TOP level.
 The pattern is confirmed on a
break of the intermediate swing
low.

 A reversal pattern at the bottom

of a downtrend.
 Price forms two swing lows at
approximately the same price
DOUBLE BOTTOM level.
 The pattern is confirmed on a
break of the intermediate swing
high.
 Charting Patterns (Macro) (2 of 4)

REVERSAL PATTERNS
NAME DESCRIPTION DIAGRAM

 A reversal pattern at the top of an

uptrend.
 Price forms three swing highs at
approximately the same price
TRIPLE TOP level.
 The pattern is confirmed on a
break of the lowest of the
intermediate swing lows.

 A reversal pattern at the bottom

of a downtrend.
 Price forms three swing lows at
approximately the same price
TRIPLE BOTTOM level.
 The pattern is confirmed on a
break of the highest of the
intermediate swing highs.

 A reversal pattern at the top of an

uptrend.
 Price forms a swing high, a higher
swing high, and a lower swing
HEAD AND
high.
SHOULDERS  The pattern is confirmed on a
break of the neckline – the line
joining the intermediate swing
lows.

 A reversal pattern at the bottom

of a downtrend.
 Price forms a swing low, a lower
swing low, and a higher swing
INVERTED HEAD
low.
AND SHOULDERS  The pattern is confirmed on a
break of the neckline – the line
joining the intermediate swing
highs.
 Charting Patterns (Macro) (3 of 4)

CONTINUATION PATTERNS
NAME DESCRIPTION DIAGRAM

 A continuation pattern.
 Price contracts with lower swing
highs (falling trendline) and higher
swing lows (rising trendline)
SYMMETRICAL
towards a single point.
TRIANGLE  The pattern is confirmed on a
break of the triangle, usually
occurring in the final third of the
pattern.

 A continuation pattern.
 Price contracts with level swing
highs (short-term resistance) and
higher swing lows (rising
ASCENDING
trendline) towards a single point.
TRIANGLE  The pattern is confirmed on a
break of short-term resistance,
usually occurring in the final third
of the pattern.

 A continuation pattern.
 Price contracts with lower swing
highs (falling trendline) and level
swing lows (short-term support)
DESCENDING
towards a single point.
TRIANGLE  The pattern is confirmed on a
break of short-term support,
usually occurring in the final third
of the pattern.

 A continuation pattern.
 Price forms a short-term range
with level swing highs forming
short-term resistance and level
RECTANGLE swing lows forming short-term
support.
 The pattern is confirmed on a
break of the pattern in the
continuation direction.
 Charting Patterns (Macro) (4 of 4)

CONTINUATION PATTERNS
NAME DESCRIPTION DIAGRAM

 A continuation pattern.
 Price forms a short-term
consolidation, tilted against the
direction of the market trend,
FLAG between approximately parallel
sloping support & resistance.
 The pattern is confirmed on a
break of the pattern in the
continuation direction.

 A continuation pattern.
 Price forms a short-term
symmetrical triangle pattern
(smaller scale than the usual
PENNANT symmetrical triangle).
 The pattern is confirmed on a
break of the pennant in the
continuation direction.

REVERSAL OR CONTINUATION PATTERNS

NAME DESCRIPTION DIAGRAM

 A continuation or reversal
pattern.
 Price forms higher swing highs
and higher swing lows which both
RISING WEDGE converge towards one point.
 The pattern is confirmed on a
break of the lower trendline of
the pattern.

 A continuation or reversal
pattern.
 Price forms lower swing highs and
lower swing lows which both
FALLING WEDGE converge towards one point.
 The pattern is confirmed on a
break of the upper trendline of
the pattern.