You may think I have made a mistake and added Rising and falling wedge patterns in both Reversal and Continuation chart patterns. Traders use them to predict potential price directions and plan their trades accordingly. Continuation Chart PatternsĬontinuation chart patterns are price formations in financial markets that suggest an ongoing trend will likely resume after a temporary pause. I have already given a chart pattern with examples in the chart pattern cheat sheet, so you can check it out there. Traders use these chart patterns to enter or exit the market. A reversal pattern appears when a stock reaches a certain level, and pressure on buyers or sellers increases, causing a price reversal.

Reversal Chart PatternsĪ reversal chart patterns reverses the ongoing trend, which means if an uptrend is going on and this pattern occurs, then that uptrend will reverse to a downtrend and vice versa. We will explore these three types chart patterns one by one so you can easily understand them. And bearish patterns suggest that an existing uptrend is weakening, and a new downtrend is about to begin. Bullish patterns indicate that a downtrend is likely ending, and a new uptrend is beginning. These chart patterns are decided based on bullish or bearish momentum. There are three types of Chart Patterns, which include Reversal, Continuation, and Bilateral chart patterns. It’s like a cheat sheet of Candlestick Patterns, which will improve your trading and help you become more skilled. If you want to enhance your trading skills, check out this 35 Powerful Candlestick Patterns PDF. This is a basic part of technical analysis in trading, just like candlesticks and candlestick patterns.

So, understanding and learning them are necessary for traders. These chart patterns help us identify trends, reversals, and trading opportunities. Chart Patterns are different patterns made by price on the chart of stock, crypto, currency, commodity, etc.

Falling wedge in uptrend