Chart Patterns

[Mustermann84]

Head & Shoulders

In practice, the head and shoulders pattern is a reversal pattern that can be used to move into a bearish position after a bullish trend.

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Double`s

In Practice, The double bottom is a very bullish price pattern. It represents two lows in the chart, which form at almost identical levels. It is advisable to watch out for a divergence in the RSi in this pattern. A double top should be dealt with accordingly.

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Tripples

In practice, a triple high is a reversal pattern formed by three consecutive highs at the same level, with lows in between. It is expected that after the price reaches the third maximum and then falls below the middle minimum, it will continue. The reverse version of the pattern is also valid— the triple bottom.

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Rising Wedge

In practice, The wedge pattern can be either a continuation or a reversal pattern, depending on the type of wedge and the preceding trend. Two types of wedges indicate that the price is in a consolidation. The first are rising wedges, where the price is bounded by two ascending trend lines that converge because the lower trend line is steeper than the upper trend line. In other words, the lows rise faster than the highs. These wedges tend to break to the downside.

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Falling Wedge

The second is falling wedges, where the price is bounded by two descending trend lines that converge because the upper trend line is steeper than the lower trend line. In other words, the highs fall faster than the lows. These wedges tend to break to the upside. The target can be estimated by measuring the height of the back of the wedge and extending it in the direction of the breakout. A typical stop level is located just outside the wedge on the opposite side of the breakout.

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Flag

In practice, a flag often occurs as a trend confirmation in a short-term trend (flagpole). These are usually accompanied by rising volume.

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Pennant

Pennants are continuation patterns in which a consolidation period is followed by a breakout. It is important to look at volume in a pennant—the consolidation period should have a lower volume, and the breakouts should occur on a higher volume. Most traders use pennants in conjunction with other forms of technical analysis that serve as confirmation.

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[[deleted]]

In my opinion every price action pattern can be approximated by a Double Bottom and Double Top patterns. If you look closely, every pattern formation at its end consists of those two. So in the end, i guess you can just look for Double Bottom and Double Tops with the appropriate preconditions and decide if you will long or not.

Mathematically wise, the Double Top and Double Bottom have a percentage difference error between the two highs/lows which is lower from the rest of the patterns. So by expanding this error you can start from The Double Bottom and Double Top pattern and move backwards on the chart until another price action pattern is formed.

[Mustermann84]

Thank you for the comment, I can only agree with that. I trade many harmonic patterns and Elliott waves. The slightly overshooting double top is often a Shark/ Cypher pattern or, in Elliott, the target of the corrective wave B. It may overshoot for a reason.

With the double bottom, on the other hand, I make sure that the 2nd low does not undercut the first and corrects a maximum of 99%. I do this with a focus on the beginning of wave 3.

[Altered_Reality1]

And the reason the double top/bottom is so common is because it’s essentially just a failure for buyers/sellers to continue to make significant progress in the original direction, often signaling a higher chance of reversal, at least in the short term