DIFFERENT TYPES OF CHART PATTERNS

 DIFFERENT TYPES OF CHART PATTERNS

Bullish Patterns

1.      Cup & Handle (REVERSAL)

2.      Inverse Head & Shoulders (REVERSAL)

3.      Double Bottom (W) (REVERSAL)

4.      Rounding Bottom (REVERSAL)

5.      Bull Flag (CONTINUATION)

6.      Bull Pennant (CONTINUATION)

7.      Falling Wedge (CONTRACTING)

8.      Ascending Triangle (CONTRACTING)

9.      Falling Broadening Wedge (EXPANDING)

10   Broadening Bottom (EXPANDING)

11   Ascending Channel (PARALLEL)

Bearish Patterns

1.      Head & Shoulders (REVERSAL)

2.      Cup & Handle Inverted (REVERSAL)

3.      Double Top (M) (REVERSAL)

4.      Rounding Top (REVERSAL)

5.      Bear Flag (CONTINUATION)

6.      Bear Pennant (CONTINUATION)

7.      Rising Wedge (CONTRACTING)

8.      Descending Triangle (CONTRACTING)

9.      Rising Broadening Wedge (EXPANDING)

10   Broadening Formation (EXPANDING)

11   Descending Channel (PARALLEL)

12   Bi-Directional Contracting

13   Symmetrical Triangle (Contracting)

14   Flat Base / Consolidation Base (Continuation)

15   Horizontal Channel / Range (Parallel)

16   Rectangle (Parallel)

 

 

Bullish Patterns

1.      Cup & Handle (REVERSAL)

Bias: Strongly bullish breakout pattern.

Success tendency: High (~70–80%).

Why profitable:

Combines accumulation + momentum breakout

Low failure rate

Long rally potential
Profitability: ★★★★★ (Very high)
Breakout Accuracy: 65–80%
Targets: Typically 20–40%+ in equities.


2.      Inverse Head & Shoulders (REVERSAL)

Bias: Strongly bullish.

Success tendency: High (~65–85%).

Why:

Strong bottoming formation

Reliable volume confirmation
Profitability: ★★★★★
Accuracy: 65–85%
Targets: Deep trend reversals → large moves.

 


3.      Bull Flag (CONTINUATION)

Working: Sharp rally → small descending channel.

Bias: Bullish continuation.

Success tendency: Very high (~70–85%).

Why:

Continuation in a strong trend

Rarely fail in high momentum assets
Profitability: ★★★★☆
Accuracy: 70–85%
Targets: Often equal to the flagpole (excellent R:R).


4.      Bull Pennant (CONTINUATION)

Bias: Bullish.

Success tendency: ~60–80%.

Why:

Mini rest before explosive continuation
Profitability: ★★★★☆
Accuracy: 60–80%
Targets: Similar to flags, slightly less reliable.

 


5.      Falling Wedge (CONTRACTING)

Structure: Lower highs & lower lows converging downward.

Working: Sellers weaken; buyers initiate rally.

Bias: Bullish.

Success tendency: High (~65–75%).

Breakout: Up.

Why:

Short-covering + early accumulation
Profitability: ★★★★☆
Accuracy: 65–75%
Targets: Often moderately large.


6.      Double Bottom (W) (REVERSAL)

Bias: Bullish.

Success tendency: Good (~65–75%).

Profitability: ★★★★☆
Accuracy: 60–75%
Targets: Good but usually smaller than H&S or wedges.


7.      Ascending Triangle (CONTRACTING)

Structure: Flat top + rising lows.

Working: Higher demand pressures ceiling.

Bias: Bullish.

Success tendency: High (~70%).

Breakout: Up.

Profitability: ★★★★☆
Accuracy: 65–75%
Targets: Moderate upside continuation
Highly dependable in uptrends.

 


8.      Rounding Bottom (REVERSAL)

Slow shift from buyers losing to buyers gaining control.

Bias: Bullish.

Success tendency: Moderate-high (~60–70%).

 


9.      Falling Broadening Wedge (EXPANDING)

Structure: Expanding lows & expanding highs but trending downward.

Working: Sellers lose control as volatility rises.

Bias: Bullish.

Success tendency: Medium-high (≈ 60%).

Breakout: Usually upward.

Profitability: ★★☆☆☆
Accuracy: ~55–60%
Targets: Bullish but unpredictable.

 


10.  Broadening Bottom (EXPANDING)

Structure: Same as above, but after prolonged downtrend.

Working: High-volatility accumulation.

Bias: Bullish.

Success tendency: Moderate (≈ 55–60%).

Profitability: ★☆☆☆☆
Accuracy: 45–55%

Extreme volatility

Shallow breakouts

Many false signals.

 


11.  Ascending Channel (PARALLEL)

Structure: Parallel upper & lower trendlines sloping upwards.

Working: Healthy trend; pullbacks predictable.

Bias: Bullish (but bearish breakout risk at tops).

Success tendency: Moderate (~55–60%).

Breakout: Often down due to exhaustion.

Profitability: ★★★☆☆
Accuracy: 55–60%
Targets: Generally range-bound gains unless breakout is strong.

 


 

Bearish Patterns

1.      Head & Shoulders (REVERSAL)

Working: Buyers fail twice → reversal.

Bias: Strongly bearish.

Success tendency: High (~65–85%).

Breakout: Below neckline.

Profitability: ★★★★☆
Accuracy: 65–85%
Targets: Often trend-changing, but slower than inverse version.

 


2.      Cup & Handle Inverted (REVERSAL)

Bias: Strongly bearish breakout pattern.

Success tendency: High (~70–80%).

Why profitable:

Combines accumulation + momentum breakout

Low failure rate

Long rally potential
Profitability: ★★★★★ (Very high)
Breakout Accuracy: 65–80%
Targets: Typically 20–40%+ in equities.

 


3.      Bear Flag (CONTINUATION)

Bias: Bearish.

Success tendency: ~65–80%.

Why:

Continuation in a strong trend

Rarely fail in high momentum assets
Profitability: ★★★★☆
Accuracy: 70–85%
Targets: Often equal to the flagpole (excellent R:R).

 


4.      Bear Pennant (CONTINUATION)

Bias: Bearish.

Success tendency: ~60–75%.

Why:

Mini rest before explosive continuation
Profitability: ★★★★☆
Accuracy: 60–80%
Targets: Similar to flags, slightly less reliable.

 


5.      Rising Wedge (CONTRACTING)

Structure: Higher highs & higher lows converging upward.

Working: Uptrend loses momentum; sellers prepare breakdown.

Bias: Strongly bearish.

Success tendency: Very reliable as a top, ~65–75%.

Breakout: Down.

Why:

Strong bearish reversal when breakdown happens
Profitability: ★★★★☆
Accuracy: 65–75%
Targets: Good downside continuation potential.

 


6.      Double Top (M) (REVERSAL)

Working: Price fails to break resistance twice.

Bias: Bearish.

Success tendency: Moderate (~60–70%).

Profitability: ★★★★☆
Accuracy: 60–75%
Targets: Good but usually smaller than H&S or wedges.

 


7.      Descending Triangle (CONTRACTING)

Structure: Flat bottom + falling highs.

Working: Falling demand squeezes support.

Bias: Bearish.

Success tendency: High (~70%).

Breakout: Down.

Profitability: ★★★☆☆
Accuracy: 65–75%
Targets: Good in downtrends.

 


8.      Rounding Top (REVERSAL)

Bias: Bearish.

Success tendency: Moderate (~55–65%).

 


9.      Rising Broadening Wedge (EXPANDING)

Structure: Expanding highs & higher expanding lows, slanted upward.

Working: Buyers push price up, but volatility increases → distribution.

Bias: Bearish.

Success tendency: Medium reliability (≈ 55%).

Breakout: Usually downward’

Profitability: ★★☆☆☆
 Accuracy: ~55%
 Targets: Bearish but noisy and inconsistent.

 


10.  Broadening Formation (EXPANDING)

Structure: Higher highs & lower lows → symmetrical expansion.

Working: Chaotic market, often tops; institutions unload positions.

Bias: Bearish, but breakout can be either direction.

Success tendency: Low-medium (≈ 45–55%).

Breakout: Often down

Profitability: ★★☆☆☆
Accuracy: 45–55%
Targets: Unstable volatility → difficult to trade
Often signals distribution or topping but unreliable.

 


11.  Descending Channel (PARALLEL)

Structure: Parallel lines sloping downward.

Working: Controlled bearish trend.

Bias: Bearish (but bullish reversal common).

Success tendency: Moderate (~55–60%).

Breakout: Often up.

Profitability: ★★★☆☆
Accuracy: 55–60%
Targets: Generally range-bound gains unless breakout is strong.

 


Bi-Directional Patterns

1.      Symmetrical Triangle (Contracting)

Structure: Lower highs + higher lows → squeezing.

Working: Energy compression before trend continuation.

Bias: Neutral → breaks with prior trend ~60–70%.

Success tendency: Moderate (~55–65%).

Breakout: Either direction (slight trend-continuation bias).

Profitability: ★★★☆☆
Accuracy: 55–65%
Targets: Modest gains; direction depends on trend

 


2.      Horizontal Channel / Range (Parallel)

Structure: Parallel support & resistance.

Working: Accumulation or distribution zone.

Bias: Neutral until breakout.

Success tendency: Breakout reliability ~55–65%.

Breakout: Either direction.

 


3.      Flat Base / Consolidation Base (Continuation)

Bias: Breakout in trend direction.

Success tendency: Medium (~55–65%).

Rectangle (Parallel)

Same as channel but used in classical charting.

Often continuation: 60–70%.

Profitability: ★★★☆☆
Accuracy: 55–65%
Targets: Often small unless part of a larger trend structure


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