As promised, here’s a handy cheat sheet to help you quickly recall the most common chart patterns and what they usually signal.
We’ve broken them down by when they typically form, what type of signal they give (reversal or continuation), and the likely direction the price might head next.
Take a look:
| Chart Pattern | Forms During | Type of Signal | Likely Next Move |
|---|---|---|---|
| Double Top | Uptrend | Reversal | Down |
| Double Bottom | Downtrend | Reversal | Up |
| Head and Shoulders | Uptrend | Reversal | Down |
| Inverse Head and Shoulders | Downtrend | Reversal | Up |
| Rising Wedge | Downtrend | Continuation | Down |
| Rising Wedge | Uptrend | Reversal | Down |
| Falling Wedge | Uptrend | Continuation | Up |
| Falling Wedge | Downtrend | Reversal | Up |
| Bearish Rectangle | Downtrend | Continuation | Down |
| Bullish Rectangle | Uptrend | Continuation | Up |
| Bearish Pennant | Downtrend | Continuation | Down |
| Bullish Pennant | Uptrend | Continuation | Up |
Feel free to bookmark this page — it’s a great quick reference before you enter any trade. You never know when you’ll need a little reminder!
And yes, in case you’re wondering — we left out the triangle patterns (symmetrical, ascending, and descending) from this cheat sheet.
Why? Because triangles are a bit tricky.
They can form during either an uptrend or downtrend and can signal either a continuation or a reversal. That’s why they’re not as easy to categorize.
It might sound a bit confusing, but don’t worry — with practice and experience, you’ll get the hang of it.
The key is to stay prepared. Have your entry and exit orders ready so you can jump in whichever way the market decides to go.