Chart Patterns: Head and Shoulders, Triangles, and More

Head and Shoulders is a reversal pattern with three peaks - the middle (head) is highest. A break below the neckline confirms the bearish reversal.

Double tops and bottoms form when price tests a level twice and fails. They signal exhaustion and potential reversal. Volume typically decreases on second test.

Triangles are continuation patterns. Ascending triangles (flat top, rising bottom) are bullish. Descending triangles (flat bottom, falling top) are bearish.

Symmetrical triangles show compression before a breakout. Trade the direction of the breakout, not the pattern itself.

Measure pattern height to estimate price targets. For example, a head and shoulders pattern projects a move equal to the height from head to neckline.