Understanding Chart Pattern Categories
Chart patterns generally fall into three main categories:
1. Continuation Patterns
These suggest that the current trend is likely to continue after a temporary pause.
2. Reversal Patterns
These indicate that an existing trend may be weakening and could change direction.
3. Bilateral Patterns
These show uncertainty, where price may break either upward or downward depending on momentum.
Recognizing the category helps traders align with market conditions rather than trade against them.
Trending Structures
1. Ascending Staircase (Uptrend)
Price forms higher highs and higher lows, showing strong buying pressure. Pullbacks are usually healthy and often used as buying opportunities.
📈 Image idea: Higher highs & higher lows staircase pattern
2. Descending Staircase (Downtrend)
Price creates lower highs and lower lows, signaling sustained selling pressure. Small rallies usually fail and provide short-selling opportunities.
📉 Image idea: Lower highs & lower lows staircase pattern
Triangle Patterns
3. Ascending Triangle
Higher lows form against flat resistance. Buyers gain strength, and a breakout above resistance often confirms bullish continuation.
🔺 Image idea: Flat top, rising bottom triangle
4. Descending Triangle
Lower highs press against flat support. Sellers dominate, and a breakdown confirms bearish continuation.
🔻 Image idea: Flat bottom, falling top triangle
5. Symmetrical Triangle
Both highs and lows converge, showing balance and indecision. The breakout direction, confirmed by volume, determines bias.
🔺🔻 Image idea: Converging triangle apex
Flags and Wedges
6. Bullish & Bearish Flags
Flags appear after strong moves and represent short consolidations.
Bullish flag: slopes downward after an uptrend
Bearish flag: slopes upward after a downtrend
🚩 Image idea: Sharp move followed by small channel
7. Rising Wedge
Price moves upward but momentum weakens. Often breaks downward, signaling a bearish reversal.
📐 Image idea: Upward narrowing wedge
8. Falling Wedge
Price compresses downward with declining volume. Usually breaks upward, signaling bullish reversal.
📐 Image idea: Downward narrowing wedge
Reversal Patterns
9. Double Top & Double Bottom
Double Top: Two failed highs → bearish reversal
Double Bottom: Two failed lows → bullish reversal
🔁 Image idea: “M” shape and “W” shape patterns
10. Head and Shoulders
One of the most reliable reversal patterns. A higher peak (head) between two lower peaks (shoulders). A break of the neckline confirms trend reversal.
👤 Image idea: Classic head & shoulders structure
Rounded Patterns
11. Rounded Bottom & Cup and Handle
These form slowly and reflect long-term sentiment shifts.
Rounded bottom shows accumulation
Cup and handle signals bullish continuation after consolidation
☕ Image idea: Smooth curved base with small handle
Example: $BNB Weekly Analysis
On the weekly chart, BNB formed a head and shoulders top, signaling exhaustion after the rally toward the $1,300 area. The neckline breakdown confirms a bearish reversal.
Price is now moving in a descending staircase, testing long-term ascending support. While a short-term bounce is possible, the broader structure remains bearish unless key resistance levels are reclaimed.
Trading Chart Patterns with Discipline
Wait for confirmation, not anticipation
Use volume and momentum indicators
Place stop-losses where the pattern clearly fails
Measure profit targets based on pattern size
Risk management always comes first.
Final Thoughts
Chart patterns visually represent market psychology. When combined with discipline, volume, and proper risk management, they become powerful tools for understanding structure and momentum. While no pattern works every time, mastering these 11 chart patterns builds a strong foundation for confident trading decisions.