Source-aware field guide · 20 answers
Chart Pattern Reference
Reproducible definitions for common price-chart formations, including the anchors, confirmation rules and invalidation points that labels often omit.
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How to use this guide
Reproducible definitions for common price-chart formations, including the anchors, confirmation rules and invalidation points that labels often omit. The guide is written for traders, educators, analysts and charting-tool reviewers. The collection describes geometric price labels and measurement conventions without treating a historical shape as a forecast.
Use every answer to resolve one operational question: Which pivots and thresholds define the formation, when is it considered complete, and what event invalidates the label? Pivot selection, scale, timeframe and confirmation rules can change a pattern. Visual resemblance alone is not a testable definition.
The supporting set is MetaTrader 5 Help — Technical indicators; MetaTrader 5 Help — Charts; CME Group — Technical analysis. These links provide standards, regulator material or official product documentation for the subject; they do not imply endorsement, worldwide applicability or a verified feature in a particular deployment. Check the current source, contract, configuration and qualified local advice before a production, trading or compliance decision.
What Is a Head and Shoulders Pattern?
A head and shoulders formation uses three prominent peaks with the middle peak higher than the outer peaks and a neckline drawn through intervening lows.
- Use it to
- Record pivot rules, neckline anchors, completion event and invalidation point.
- Check the boundary
- Subjective peak selection can create the pattern after the fact and does not predict a target.
What Is an Inverse Head and Shoulders?
An inverse head and shoulders uses three prominent troughs with the middle trough lower than the outer troughs and a neckline through intervening highs.
- Use it to
- Define the trough detector, neckline, breakout tolerance and failed-break condition.
- Check the boundary
- Sloping necklines and unequal shoulders require explicit acceptance rules.
What Is a Double Top?
A double top labels two highs within a stated tolerance separated by a meaningful pullback, with completion often tied to a break below the intervening low.
- Use it to
- Quantify peak similarity, separation, trough depth and confirmation.
- Check the boundary
- Two similar highs without the chosen confirmation may only describe a range.
What Is a Double Bottom?
A double bottom labels two lows within a stated tolerance separated by a meaningful rebound, with completion often tied to a break above the intervening high.
- Use it to
- Quantify low similarity, time separation, rebound size and completion.
- Check the boundary
- Rounding, spreads and pivot sensitivity can materially alter the classification.
What Is a Triple Top?
A triple top uses three highs within a declared price band and intervening pullbacks, with a separate rule for when the range has resolved.
- Use it to
- Define the band width, minimum pullback, spacing and confirmation level.
- Check the boundary
- Adding a third touch does not guarantee that resistance will hold.
What Is a Triple Bottom?
A triple bottom uses three lows within a declared price band and intervening rebounds, with completion defined by a selected resistance break.
- Use it to
- State the tolerance, rebound requirement, spacing and invalidation.
- Check the boundary
- Many range-bound sequences can be forced into this label if pivot rules are loose.
What Is an Ascending Triangle?
An ascending triangle combines a relatively flat sequence of highs with rising lows under a chosen trendline and touch rule.
- Use it to
- Record anchor points, tolerance, minimum touches, completion and failed-break logic.
- Check the boundary
- Flat and rising are approximate descriptions that need numerical thresholds.
What Is a Descending Triangle?
A descending triangle combines a relatively flat sequence of lows with falling highs under a chosen trendline and touch rule.
- Use it to
- Measure the support band, descending boundary and breakout criterion.
- Check the boundary
- The pattern can resolve in either direction despite common directional labels.
What Is a Symmetrical Triangle?
A symmetrical triangle uses converging upper and lower boundaries around contracting price swings, without requiring a flat side.
- Use it to
- Define pivot anchors, convergence, minimum span and completion.
- Check the boundary
- Automated results vary sharply with the swing detector and log versus linear scale.
What Is a Flag Pattern?
A flag pattern pairs a sharp directional move with a shorter, generally counter-sloping or sideways consolidation bounded by parallel lines.
- Use it to
- Quantify the impulse, channel, duration, completion and failure conditions.
- Check the boundary
- Calling every small pause a flag creates severe selection bias.
What Is a Pennant Pattern?
A pennant pairs a strong directional move with a brief consolidation whose boundaries converge before a chosen resolution event.
- Use it to
- Separate the initial impulse from the converging consolidation and define breakout.
- Check the boundary
- Its similarity to a small triangle makes duration and context rules important.
What Is a Rising Wedge?
A rising wedge uses two upward-sloping converging boundaries around price swings, with the lower boundary typically rising faster.
- Use it to
- Record anchors, convergence, touch count and the event that completes or invalidates it.
- Check the boundary
- Visual wedge direction does not ensure the direction of the next move.
What Is a Falling Wedge?
A falling wedge uses two downward-sloping converging boundaries around price swings, with the upper boundary typically falling faster.
- Use it to
- Define pivots, slopes, convergence and confirmation.
- Check the boundary
- Different pivot sensitivities can reverse the apparent boundary geometry.
What Is a Cup and Handle Pattern?
A cup and handle label describes a rounded decline and recovery toward a prior high followed by a smaller consolidation before a selected breakout.
- Use it to
- Quantify rim similarity, cup depth, duration, handle size and completion.
- Check the boundary
- Smoothness and shape are subjective unless the detection rules are declared.
What Is a Rectangle Pattern?
A rectangle describes repeated price movement between approximately horizontal upper and lower bands over a minimum span.
- Use it to
- Define band tolerance, touch count, overshoots and breakout confirmation.
- Check the boundary
- A later breakout does not retroactively make every earlier range a trade setup.
What Is a Rounding Bottom?
A rounding bottom describes a gradual transition from decline to stabilization and advance, approximating a broad curved trough.
- Use it to
- State the smoothing, duration, symmetry and completion rules used to detect the curve.
- Check the boundary
- Subjective visual fitting and hindsight can dominate the label.
What Is a Diamond Pattern?
A diamond formation describes price swings that first broaden and then contract, creating four approximate boundaries around a transition zone.
- Use it to
- Identify the pivots, expansion phase, contraction phase and completion rule.
- Check the boundary
- The pattern is rare and easily overfit when boundary rules are flexible.
What Is a Measured Move?
A measured move compares the magnitude of an earlier price leg with a later projected or observed leg separated by a consolidation.
- Use it to
- Record anchor points, arithmetic or logarithmic scale and the projection method.
- Check the boundary
- Equal-leg projections are descriptive scenarios, not guaranteed destinations.
What Is an Island Reversal?
An island reversal is a group of price bars isolated by gaps on both sides under a market's session and gap conventions.
- Use it to
- Define the gap, session, overlap and fill rules and verify the underlying trades.
- Check the boundary
- Nearly continuous markets may not produce meaningful gaps of this type.
What Is a Broadening Formation?
A broadening formation uses diverging boundaries around successively wider price swings, sometimes called a megaphone pattern.
- Use it to
- Quantify expanding highs and lows, anchors, span and exit event.
- Check the boundary
- Outliers and thin trading can create false boundary expansion.
Primary and official references
These sources establish definitions, standards or official product behavior used across this guide. Follow the exact source and check its current version before a live implementation.