Chart pattern
Also called: chart patterns, head and shoulders, double top, double bottom, triangle pattern, flag pattern, pennant, rectangle pattern, measured move
A named shape formed by price swings, such as a head and shoulders, double top, triangle or flag, used to describe changes in market structure.
Reversal patterns such as head and shoulders and double tops are confirmed only by a break of a neckline or swing low; continuation patterns such as triangles and flags are named partly after the breakout. Measured-move targets are conventions, not forecasts, and patterns need objective definitions and fair testing.
Learn more in these lessons
- Reversal patternsWhat are head and shoulders and double top patterns, and how reliable are they?
- Continuation patternsWhat are continuation patterns, and what can they tell you?
- Volume confirmation and its limitsDoes volume confirm price moves and chart patterns?
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