Technical Analysis May 4, 2026 10 min read Updated: May 4, 2026

Chart Patterns Cheat Sheet: Quick Reference for Traders

Q: How do I know when a chart pattern has failed?

A pattern fails when price breaks the trigger level then reverses back through it. Take the stop — don't average down on a failing pattern.

Q: Do chart patterns work on crypto?

Yes, on high-volume pairs (BTC, ETH) on 4H and daily timeframes. The same formations appear because they're driven by human psychology.

Q: How do I calculate the measured target for a chart pattern?

Measure the height of the formation at its widest point, then project that distance from the breakout level. These are minimum targets — many patterns overshoot.

James Hartwell · Forex Analyst & Senior Trader

This chart patterns cheat sheet covers the 14 most traded formations across forex and crypto markets: reversal patterns (head and shoulders, double top/bottom, rising/falling wedge) and continuation patterns (flag, pennant, triangle, cup and handle). For each pattern you'll find a brief description, the signal it gives, entry rule, stop placement, and measured target. Use this as a quick reference before a trade, not as a substitute for understanding each pattern in depth.

How to use this reference

Before any trade based on a chart pattern:

Identify the trend: reversal patterns only work at the end of established trends. Continuation patterns only work within established trends.
Confirm the level: is the pattern forming at a meaningful support, resistance, or prior swing?
Check volume: does volume support the pattern? (Rising on breakout, falling on consolidation)
Wait for the trigger: a close beyond the key level, not a wick.

Reversal patterns (signal a trend change)

Head and shoulders (bearish)

Signal: uptrend ending, expect downward reversal Structure: three peaks — left shoulder, higher head, lower right shoulder. Neckline at the two pullback lows. Entry: close below the neckline Stop: above the right shoulder’s high Target: neckline minus (head to neckline distance)

Inverse head and shoulders (bullish)

Signal: downtrend ending, expect upward reversal Structure: three troughs — mirrored version of H&S Entry: close above the neckline Stop: below the right shoulder’s low Target: neckline plus (head to neckline distance)

Double top (bearish)

Signal: two failed attempts to break resistance Entry: close below the swing low between the two tops (neckline) Stop: above the second top’s high Target: neckline minus (resistance to neckline distance)

Double bottom (bullish)

Signal: two failed attempts to break support Entry: close above the swing high between the two bottoms (neckline) Stop: below the second bottom’s low Target: neckline plus (neckline to support distance)

Rising wedge (bearish)

Rising wedge (bearish) and falling wedge (bullish) — both are reversal patterns when they form against the trend

Signal: uptrend losing momentum, converging price action, bearish Structure: both upper and lower trendlines slope upward but converge toward an apex Entry: close below the lower trendline Stop: above the most recent swing high inside the wedge Target: measured from the widest point of the wedge, projected downward from the breakout

Falling wedge (bullish)

Signal: downtrend losing momentum, bearish pressure easing, bullish reversal Structure: both trendlines slope downward and converge Entry: close above the upper trendline Stop: below the most recent swing low inside the wedge Target: measured from the widest point of the wedge, projected upward from the breakout

Continuation patterns (signal the trend will resume)

Bull flag (bullish continuation)

Bull flag and ascending triangle — bullish continuation patterns

Signal: uptrend pausing to consolidate before continuing higher Structure: strong upward “pole,” followed by tight sideways or slightly downward-sloping “flag” channel Entry: close above the upper flag trendline Stop: below the flag’s lowest low Target: add the pole height to the breakout point

Bear flag (bearish continuation)

Signal: downtrend pausing before continuing lower Structure: strong downward pole, followed by slight upward-sloping or sideways consolidation Entry: close below the lower flag trendline Stop: above the flag’s highest high Target: subtract the pole height from the breakout point

Ascending triangle (bullish continuation)

Signal: buyers making higher lows while hitting the same resistance — buyers gaining strength Structure: flat resistance line on top, rising support line below Entry: close above the flat resistance Stop: below the most recent swing low inside the triangle Target: add triangle height (widest point) to the breakout

Descending triangle (bearish continuation)

Signal: sellers making lower highs while testing the same support — sellers gaining strength Structure: flat support line on bottom, declining resistance line above Entry: close below the flat support Stop: above the most recent swing high inside the triangle Target: subtract triangle height from the breakdown

Symmetrical triangle

Signal: either direction — price is coiling before a breakout. Direction follows the prior trend. Structure: converging trendlines — lower highs and higher lows Entry: close beyond either trendline (in the direction of the prior trend) Stop: on the opposite side of the broken trendline Target: add/subtract triangle height from the breakout

Cup and handle (bullish)

Signal: consolidation after a pullback, forming a rounded bottom, followed by a brief flag — strong bullish setup Structure: rounded U-shaped “cup,” followed by a tight downward-sloping or sideways “handle” Entry: close above the cup’s rim level (resistance at the rim) Stop: below the handle’s low Target: add cup depth to the cup’s rim breakout level

Quick reference table

Pattern	Type	Direction	Entry trigger	Stop
Head & Shoulders	Reversal	Bearish	Close below neckline	Above right shoulder
Inverse H&S	Reversal	Bullish	Close above neckline	Below right shoulder
Double Top	Reversal	Bearish	Close below neckline	Above 2nd top
Double Bottom	Reversal	Bullish	Close above neckline	Below 2nd bottom
Rising Wedge	Reversal	Bearish	Close below lower TL	Above last swing high
Falling Wedge	Reversal	Bullish	Close above upper TL	Below last swing low
Bull Flag	Continuation	Bullish	Close above flag top	Below flag low
Bear Flag	Continuation	Bearish	Close below flag bottom	Above flag high
Ascending Triangle	Continuation	Bullish	Close above flat top	Below last swing low
Descending Triangle	Continuation	Bearish	Close below flat bottom	Above last swing high
Symmetrical Triangle	Continuation	Trend dir.	Close beyond trendline	Opposite trendline
Cup & Handle	Continuation	Bullish	Close above cup rim	Below handle low

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FAQ

What are the most reliable chart patterns?

Head and shoulders, double top/bottom, and bull/bear flags consistently rank highest in backtests across forex and crypto. H&S and double patterns are reversal setups best used at major levels with volume confirmation. Flags are continuation setups most reliable after high-volume breakout moves (the "pole").

What is the difference between reversal and continuation patterns?

Reversal patterns form at the end of a trend and signal a change in direction (e.g., head and shoulders, double top). Continuation patterns form in the middle of a trend during a pause and signal the trend will resume (e.g., flags, triangles, cup and handle). Same pattern in the wrong context = wrong signal.

How do I know when a chart pattern has failed?

A pattern fails when price breaks the trigger level, then reverses back through it within a few candles. For a double top: if price breaks the neckline, then closes back above it — failed. Take the stop. Don't add to a failing trade expecting the pattern to reassert. Failed patterns often lead to sharp moves in the opposite direction.

Do chart patterns work on crypto?

Yes, on high-volume pairs (BTC/USDT, ETH/USDT) on 4H and daily timeframes. Crypto shows the same classic formations as forex and stocks because they're all driven by human psychology. Lower-cap altcoins are less reliable — thin order books mean patterns can be manipulated or broken by single large orders.

How do I calculate the measured target for a chart pattern?

For most patterns: measure the height of the formation at its widest point, then project that distance from the breakout level. For head and shoulders: measure from head to neckline, project down from neckline. For triangles: measure the widest vertical distance and project from the breakout. These are minimum targets — many patterns overshoot.

James Hartwell

Forex Analyst & Senior Trader

Former FX desk trader with 8 years of experience in forex and crypto markets. Expert in multi-timeframe analysis, institutional order flow, and macroeconomic fundamentals.

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