Inverted Hammer Candlestick Pattern: What is it?
The inverted hammer is a 1-bar bullish candlestick pattern. It looks like a letter “T” upside-down. Statistics to prove if the Inverted Hammer pattern really works What is the Inverted … Read more
Chart Patterns
Did you know there are about 100 different types of chart patterns?
They come in different shapes and sizes but they all share something in common : they are a key part of technical analysis and to be able to use them you first need to recognize them.
Every chart pattern detailed with their performance and reliability stats
Below you’ll find the ultimate database with every single chart pattern. You’ll find detailed articles for each going into detailed explanation, giving you examples and data for each pattern. No more doubt about what makes a specific pattern and how well it works.
Moreover, this extensive cheat sheet will definitely give you an edge and let you understand and recognize every pattern. Plus at PatternsWizard, our absolute focus is to bring you data-driven performance statistics. So for most patterns (articles below) you’ll find data about each pattern’s performance statistics and reliability (how often they confirm, reach the target or stop, how often they appear, …) to adjust your trading strategy of financial markets.
What are chart patterns?
Chart patterns are unique formations formed by changes in the price of securities on the price chart. They are the basis of technical analysis.
There are several types of patterns: classic patterns, candlestick patterns and harmonic patterns. As a result, each type has its own specificities. Identify patterns by lines that connect common price points (such as closing prices or high or low points) within a specific time period.
Technical analysts and chart experts seek to identify patterns to predict the future direction of security prices. These patterns can be as simple as a trend line or as complex as a double head and shoulders pattern.
What are the three big categories of chart patterns?
There are three main categories that classify the chart patterns:
- Candlestick chart patterns : they are aggregates of candlesticks (usually 1 to 5). Some famous ones are the harami, stick sandwich, advance block.
- Classic / traditional / common patterns : they often represent some mathematical shapes like symmetrical triangles, bullish flag patterns, head and shoulders or the wedge pattern.
- Harmonic patterns : they are created with several legs linked together with mathematical ratios (Fibonacci levels) for price levels.
Each of these patterns have very strict requirements. To help you easily get your hands on each pattern we detailed them in their own article with everything you should know.
Of course, you can use these patterns in conjunction together, with other indicators or locations (resistance levels or resistance lines) to enhance your hints about future price movements before you take a trade.
How can they help you enhance your trading strategy?
Depending on the pattern (each pattern can tell a different story), they can be a hint for :
- Reversal patterns : it predicts price will reverse and move in the opposite direction. These reversal chart patterns help spot trend reversals.
- Continuation patterns : it predicts price will continue its move in the same direction.
Regardless of the pattern(s) you’d like to hunt and trade, you’ll need a reliable source to chart your markets. TradingView is the best solution for you! As you may have noticed, most of our charts on the site are taken from charts created on TradingView. Click here to check TradingView for free now!
Want to go into the details of a specific pattern? You’re at the right place!
These patterns often have very imaginative names. Feel free to discover the detailed article for each chart pattern right below :
Shooting Star Candlestick Pattern: What is it & How to trade it?
The shooting star is a 1-bar bearish reversal candlestick pattern This formation is bearish because the price tried to rise sharply throughout the day, but then the seller took over … Read more
Head and Shoulders Pattern: The Ultimate Guide
Recognizing chart patterns is one of the most reliable techniques for trading the market. There are various chart formations that traders can observe and apply to their arsenal. Today, we … Read more
Bullish & Bearish Pennant Pattern: Definition
The pennant pattern is a continuation pattern. The pennant shows a time of consolidation before to (likely) continue of the same trend with a breakout. The consolidation period should have … Read more
Abandoned Baby Candlestick Pattern: What is it & How to trade it?
The abandoned baby pattern is a 3-bar reversal pattern. The bullish abandoned baby follows a downtrend. It has a big red candle, a gapped down doji and then a big … Read more
Falling Wedge Pattern: Ultimate Guide [2022]
Out of all the chart patterns that exist in a bullish market, the falling wedge is an important pattern for new traders. It is a very extreme bullish pattern for … Read more
Three Black Crows Candlestick Pattern: Definition
The three black crows is a 3-bar bearish reversal pattern The pattern consists of 3 bearish candles opening above the previous one and closing below the midpoint of the previous … Read more
Inverse Head and Shoulders Pattern: Full Guide
Traders apply charts when studying various patterns in market trends, including the inverse head and shoulders pattern. This pattern is characterized by three troughs (both the upward head and shoulders … Read more
Cup and Handle Pattern: Definition & Strategy
Chart patterns usually occur when the cost of an asset goes towards a direction that a common shape, like a rectangle, triangle, head and shoulders, or in this case, a … Read more
Engulfing Candlestick Pattern: Complete Guide
An engulfing pattern is a 2-bar reversal candlestick pattern The first candle is contained with the 2nd candle A bullish engulfing pattern has a red candle engulfed within a green … Read more