Chart Patterns Cheat Sheet: What Patterns Really Mean
A practical chart pattern cheat sheet explaining triangles, flags, head and shoulders, ranges, and failed breakouts.
· 6 min read · chart-patterns, patterns, breakout, reversal
Chart patterns are not magic shapes. They are visual summaries of pressure. A triangle shows compression. A flag shows pause after impulse. A head and shoulders shows buyers failing to sustain higher prices. Learn the behavior, not the doodle.
Continuation patterns
Flags, pennants, and clean pullbacks usually pause an existing trend. The key question is whether the pause is orderly and volume contracts before expansion returns.
Reversal patterns
Head and shoulders topping pattern with a left shoulder, higher head, right shoulder, and neckline. A breakdown below the neckline projects a downside target equal to the head-to-neckline distance.
Head and shoulders, double tops, and failed breakouts matter when they show a shift from demand to supply or supply to demand. The neckline or trigger is evidence only after price accepts beyond it.
Invalidation makes the pattern tradable
A pattern is only a watchlist item until you know where it is wrong. Define invalidation before entry. Otherwise the pattern becomes a story you can keep editing as price moves against you.