Chart Patterns

An abundance of complicated chart indicators, studies and other tools has led some people to question the wisdom of this approach.

The following cheat sheet will help you to identify the most common technical patterns that appear in forex charts. Click each heading for more information.

The descending broadening wedge is easily spotted on a chart. It looks like a megaphone with a downwards tilt. It’s equally likely to appear in downtrends as well as uptrends.

The ascending broadening wedge is a chart pattern that can be traded in several ways; either as a bullish/bearish breakout or with a swing trading strategy.

A broadening wedge is a range where the price is holding between two trend lines that are moving apart. The pattern is also named a "megaphone" because of its shape.

Both rectangles and price channels appear in virtually all forex charts. Price channels can provide excellent opportunities for trend trades.

Crossing support and resistance lines meet at so called convergences or confluent areas. Is there anything significant about these areas?

Trend reversals are often led by double top or double bottom chart patterns. If the reversal fails it can lead to a double top/bottom breakout.

When a falling wedge pattern appears in a forex chart it hints at bullish sentiment. Like the rising wedge, this pattern is quite common at all time scales.

Of the triangular patterns found in forex charts, the symmetrical triangle is possibly the most confusing and also the most difficult to trade. But how useful is this chart pattern in practice?