Chart

Patterns

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 CONTENT

1. Ascending triangle
2. Descending triangle
3. Symmetrical triangle
4. Pennant
5. Wedge
6. Double bottom
7. Double top
8. Head and shoulders
9. Rounding top or bottom
10. Cup and handle
11. Shooting star
12. Morning star
13. Hanging man
14. Evening star
15. Doji
16. Spinning top
17. Engulfing
18. Inverse Hammer
19. Hammer
20. Harami
21. Piercing
22. Three white soldiers
23. Dark cloud cover
1. Ascending triangle
The ascending triangle is a bullish ‘continuation’ chart pattern that signifies a breakout
is likely where the triangle lines converge. To draw this pattern, you need to place a
horizontal line (the resistance line) on the resistance points and draw an ascending line
(the uptrend line) along the support points.

2. Descending triangle

Unlike ascending triangles, the descending triangle represents a bearish market

downtrend. The support line is horizontal, and the resistance line is descending,
signifying the possibility of a downward breakout.
3. Symmetrical triangle

For symmetrical triangles, two trend lines start to meet which signifies a breakout in
either direction. The support line is drawn with an upward trend, and the resistance
line is drawn with a downward trend. Even though the breakout can happen in either
direction, it often follows the general trend of the market.
4. Pennant

Pennants are represented by two lines that meet at a set point. They are often formed
after strong upward or downward moves where traders pause and the price
consolidates, before the trend continues in the same direction.

5. Wedge

A wedge pattern represents a tightening price movement between the support and
resistance lines, this can be either a rising wedge or a falling wedge. Unlike the triangle,
the wedge doesn’t have a horizontal trend line and is characterised by either two
upward trend lines or two downward trend lines.

For a downward wedge, it is thought that the price will break through the resistance
and for an upward wedge, the price is hypothesised to break through the support. This
means the wedge is a reversal pattern as the breakout is opposite to the general trend.
6. Double bottom

A double bottom looks similar to the letter W and indicates when the price has made
two unsuccessful attempts at breaking through the support level. It is a reversal chart
pattern as it highlights a trend reversal. After unsuccessfully breaking through the
support twice, the market price shifts towards an uptrend.
7. Double top
Opposite to a double bottom, a double top looks much like the letter M. The trend enters
a reversal phase after failing to break through the resistance level twice. The trend then
follows back to the support threshold and starts a downward trend breaking through
the support line.
8. Head and shoulders

The head and shoulders pattern tries to predict a bull to bear market reversal.
Characterised by a large peak with two smaller peaks either side, all three levels fall
back to the same support level. The trend is then likely to breakout in a downward
motion.

9. Rounding top or bottom

A rounding bottom or cup usually indicates a bullish upward trend, whereas a rounding
top usually indicates a bearish downward trend. Traders can buy at the middle of the U
shape, capitalising on the trend that follows as it breaks through the resistance levels.
10. Cup and handle
The cup and handle is a well-known continuation stock chart pattern that signals a
bullish market trend. It is the same as the above rounding bottom, but features a handle
after the rounding bottom. The handle resembles a flag or pennant, and once completed,
you can see the market breakout in a bullish upwards trend.
11. Shooting star

A shooting star candlestick pattern is a chart formation that occurs when an asset’s
market price is pushed up quite significantly, but then rejected and closed near the open
price. This creates a long upper wick, a small lower wick and a small body.
12. Morning star
The morning star candlestick pattern is considered a sign of hope in a bleak market
downtrend. It is a three-stick pattern: one short-bodied candle between a long red and a
long green. Traditionally, the ‘star’ will have no overlap with the longer bodies, as the
market gaps both on open and close.

13. Hanging man

The hanging man is the bearish equivalent of a hammer; it has the same shape but forms
at the end of an uptrend.

It indicates that there was a significant sell-off during the day, but that buyers were able
to push the price up again. The large sell-off is often seen as an indication that the bulls
are losing control of the market.
14. Evening star

The evening star is a three-candlestick pattern that is the equivalent of the bullish
morning star. It is formed of a short candle sandwiched between a long green candle
and a large red candlestick.

15. Doji

The market is in a downtrend and a strong black candlestick further confirms you.
When you start trading on the next day it opens lower with a gap down, and the trading
is in a small range.
16.Spinning top

The spinning top candlestick pattern has a short body centred between wicks of equal
length. The pattern indicates indecision in the market, resulting in no meaningful
change in price: the bulls sent the price higher, while the bears pushed it low again.
Spinning tops are often interpreted as a period of consolidation, or rest, following a
significant uptrend or downtrend.

17. Engulfing

You will find Bullish Engulfing Candlestick chart patterns at the bottom of a downtrend
or near a support zone. It normally takes two days for the Engulfing pattern formed and
is made up of two Candlestick.
18. Inverse Hammer

A bullish Hammer pattern is made up of just one candle and you will find at the bottom
or near support zone. It looks like a hammer, as it has a long lower stick and a short
body. At the top of the candlestick, it has a little or no upper stick.

19. Hammer

The hammer candlestick pattern is formed of a short body with a long lower wick, and is
found at the bottom of a downward trend.

A hammer shows that although there were selling pressures during the day, ultimately a
strong buying pressure drove the price back up. The colour of the body can vary, but
green hammers indicate a stronger bull market than red hammers.
20.Harami

You will find a Bullish Harami Pattern at the bottom of a downtrend or near a significant
support. It is also made up of two Candlestick and takes two days for this pattern to
form.

21.Piercing

The Bullish Piercing Line Chart Pattern is yet another bullish candlestick reversal chart
pattern. It is formed at the downtrend and consist of two Candlestick and also takes two
days for this pattern to form.

22.Three white soldiers

The three white soldiers pattern occurs over three days. It consists of consecutive long
green (or white) candles with small wicks, which open and close progressively higher
than the previous day.
23.Dark cloud cover

The dark cloud cover candlestick pattern indicates a bearish reversal – a black cloud
over the previous day’s optimism. It comprises two candlesticks: a red candlestick
which opens above the previous green body, and closes below its midpoint.
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