Elearnmarkets - Financial Market Learning
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
  • Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • English
    • Hindi
    • Bengali
No Result
View All Result
  • Courses
  • Webinars
  • Learn On Elearnmarkets
Elearnmarkets - Learn Stock Market, trading, investing for Free
No Result
View All Result
Home Technical Analysis
Top 10 Chart Patterns you should know when Trading in the Stock Market 1

Top 10 Chart Patterns you should know when Trading in the Stock Market

Elearnmarkets by Elearnmarkets
February 7, 2023
in Technical Analysis, Charts, Patterns & Indicators
Reading Time: 12 mins read
13
137.1k
VIEWS
Share on FacebookShare on TwitterShare on WhatsApp
  • Chart patterns put all buying and selling that’s happening in the stock market into a concise picture.
  • Chart patterns tend to repeat themselves over and over again which helps to appeal to human psychology and trader psychology in particular.
  • If you are able to learn to recognize these patterns early they will help you to gain a real competitive advantage in the markets.
  • Chart patterns can be continuation, reversal or bilateral pattern.
  • Chart patterns provide a complete pictorial record of all trading, and also provides a framework for analyzing the battle between bulls and bears.
    Table of Contents
   What are Chart Patterns?
   Why is it Important to analyze the Chart Patterns?
   Types of Chart Patterns

Chart patterns play a crucial role when analyzing the charts for trading.

In technical analysis, the transitions in the trends are signaled by these charts patterns.

By learning about these chart patterns, you will be able to learn how to profit from these technical price patterns.

Also Read: Certification in Technical Analysis

But before you start analyzing these patterns, it’s better to learn about it.

In order to get grips with them, here are top 10 chart patterns that every trader should know when trading in the stock market.

But before knowing that let us discus basics of the chart patterns:

Join TMP Join TMP Join TMP

What are Chart Patterns?

chart patterns for stock market analysis

Chart patterns put all buying and selling that’s happening in the stock market into a concise picture.

It provides complete pictorial record of all trading, and also provides a framework for analyzing the battle between bulls and bears.

Chart patterns can help us in determining who is winning the battle, and also allowing traders to position themselves accordingly.

Chart pattern analysis can be used to make short-term as well as long-term forecasts.

The data used by the chart patterns can be intraday, daily, weekly, monthly or yearly.

Gaps and reversals may form in one trading session, while broadening tops and dormant bottoms may require many months to form.

Why is it Important to analyze the Chart Patterns?

Chart patterns are a great way of viewing price actions which occur during the stock trading period.

Chart patterns tend to repeat themselves over and over again which helps to appeal to human psychology and trader psychology in particular.

Also Read: How to apply Hidden RSI Divergence for Swing Trading?

If you are able to learn to recognize these patterns early they will help you to gain a real competitive advantage in the markets.

Just as volume, support and resistance levels, RSI, and Fibonacci Retracements and other technical indicators, stock chart patterns helps in identifying trend reversals and continuations.

Types of Chart Patterns:

Chart patterns can be basically classified into:

  • Continuation patterns: These kinds of chart patterns give continuation signals of the ongoing trend
  • Reversal Patterns: These kinds of chart patterns give reversal signals
  • Bilateral Patterns: These kinds of chart patterns shows uncertainty and high volatility in the market.

Here are the 10 most useful chats patterns which will help you in trading:

Top 10 Chart Patterns

1. Head and Shoulders:

This is a bullish and bearish reversal patterns which has a large peak in the middle and smaller peaks on the either sides.

Head and shoulders pattern is considered to be one of the most reliable reversal chart patterns.

This pattern is formed when the prices of the stock rises to a peak and falls down to the same level from where it had started rising.

Again the prices rises and form a peak higher than the last peak and again it declines to the original base.

Prices again rise to form a third peak, which is lower than the second peak and from here it starts declining to the base level.

When the prices break the baseline with volume then bearish reversal takes place.

Top 10 Chart Patterns you should know when Trading in the Stock Market 2

For understanding Trading Strategies and the performance of stocks forming Bullish Head & Shoulder Pattern patterns, Click Here.

2. Double top:

A double top is another bearish reversal pattern that traders use a lot.

The stock price will form a peak and then retrace back to a level of support. It will then form a peak once more before reversing back from the prevailing trend.

Top 10 Chart Patterns you should know when Trading in the Stock Market 3

3. Double Bottom:

A double bottom is bullish reversal pattern that is totally opposite of double top.

The stock price will form a peak and then retrace back to a level of resistance. It will then form a peak once more before reversing back from the prevailing trend.

Top 10 Chart Patterns you should know when Trading in the Stock Market 4

4. Cup and Handle:

A cup and handle is a bullish reversal chart pattern which resembles a cup and handle where the cup is in the shape of a “U” and the handle has a slight downward drift.

The cup appears similar to a rounding bottom chart pattern, and the handle is similar to a wedge pattern.

The right-hand side of the pattern has low trading volume that may be as short as seven weeks or as long as 65 weeks.

Top 10 Chart Patterns you should know when Trading in the Stock Market 5

5. Rounding Bottom:

This pattern is also known as the “saucer bottom” and is long-term reversal chart pattern.

Rounding Bottom shows that the stock is reversing from a downward trend towards an upward trend.

Also Read : Technical Analysis and Importance of Volume in Trading

It can take any time from several months to years to form. It is very similar to the cup and handle, but the only difference is that there is no handle to the pattern.

Top 10 Chart Patterns you should know when Trading in the Stock Market 6

6. Wedges :

Wedges are bullish and bearish reversal as well as continuation patterns which are formed by joining two trend lines which converge. It can be a rising wedge or a falling wedge.

Rising wedge occurs when the price of the stock is rising over a time whereas falling wedge occurs when the price of the stock is falling over a time.

Wedge pattern can be drawn by using trend lines and connecting the peaks and the troughs.

Once there is price breakout, there is a sharp movement of prices in either of the directions.

Top 10 Chart Patterns you should know when Trading in the Stock Market 7

For understanding Trading Strategies and the performance of stocks forming Falling Wedge patterns, Click Here.

7. Pennants:

A pennant pattern or a flag pattern is created when there is a sharp movement in the stock either upward or downward.

This is followed by a period of consolidation that creates the pennant shape because of the converging lines.

Then a breakout movement occurs in the same direction as the big stock move. Pennants patterns are similar to flag patterns and tend to last between one and three weeks.

At the initial stock movement there is a significant volume which is followed by weaker volume in the pennant section, and then rise in the volume at the breakout.

Top 10 Chart Patterns you should know when Trading in the Stock Market 8

8. Symmetrical Triangles:

Symmetrical Triangles can be bullish or bearish continuation chart patterns that are developed by two trend lines which converge.

These two trend lines join the peaks and troughs and they occur in the direction of the ongoing trend.

Top 10 Chart Patterns you should know when Trading in the Stock Market 9

For understanding Trading Strategies and the performance of stocks forming Symmetrical Triangle patterns, Click Here.

9. Ascending Triangles:

This triangle appears during an upward trend and is regarded as a bullish continuation pattern.

Sometimes it can be also created at the end of a downward trend as a reversal pattern, but it more commonly considered as a continuation chart pattern.

Ascending triangles are always regarded as bullish patterns whenever they are formed in the charts.

Top 10 Chart Patterns you should know when Trading in the Stock Market 10

For understanding Trading Strategies and the performance of stocks forming Ascending Triangle patterns, Click Here.

10. Descending Triangles:

Just like the ascending triangle, the descending triangle is also a continuation chart pattern. The only difference is that it is a bearish continuation pattern and it is created during the downtrend.

Know more: – What are Ascending & Descending Triangle Patterns ?

Sometimes it can be also created at the end of an uptrend as a reversal pattern, but it more commonly considered as a continuation chart pattern.

Top 10 Chart Patterns you should know when Trading in the Stock Market 11

For understanding Trading Strategies and the performance of stocks forming Descending Triangle patterns, Click Here.

How to use Chart Patterns Scanners in StockEdge?

StockEdge has developed a deeper analysis of stock charts and has developed this unique feature to identify some key chart patterns in StockEdge charts for you; where you will receive a list of stocks where respective chart patterns have recently formed, allowing you to capitalize on trade opportunities as soon as a chart pattern is formed.

The StockEdge Pro version has five categories of chart patterns. There are 12′ unique chart pattern types covering bullish, bearish, and neutral momentum:


After clicking on any of the above chart patterns, you will get a list of different types of that particular chart pattern, for example when we click on Triangle patterns, we will get the list as shown below:

To get the list of stocks exhibiting a particular type of chart pattern, click on the name of that chart pattern:

By clicking on the stock’s name, the stock chart will be shown below:

You can also watch our video below

You can add your comments below and we would like to know what chart patterns you like to trade besides the 10 above.

Happy Learning!

In order to get the latest updates about Financial Markets visit StockEdge

Tags: basicchart patterncontinuation patternenglishreversal patterntechnical basics
Share4TweetSend
Previous Post

ব্যক্তিগত অর্থ পরিচালনা করার ৫টি সরল পরামর্শ

Next Post

500 रुपये के साथ निवेश करना – जानें इसे करने के शीर्ष 5 तरीके

Elearnmarkets

Elearnmarkets

Elearnmarkets (ELM) is a complete financial market portal where the market experts have taken the onus to spread financial education. ELM constantly experiments with new education methodologies and technologies to make financial education effective, affordable and accessible to all. You can connect with us on Twitter @elearnmarkets.

Related Posts

Technical Analysis in Stock Trading 12
Technical Analysis

Technical Analysis in Stock Trading

May 31, 2023
6k
The Ultimate guide to Trading Divergences 13
Technical Analysis

The Ultimate guide to Trading Divergences

May 26, 2023
993
Trading Psychology: Guide to Master Your Mind in 5 Steps 14
Technical Analysis

Trading Psychology: Guide to Master Your Mind in 5 Steps

May 24, 2023
3k
Trading Psychology: 7 Keys to Successful Trading 15
Technical Analysis

Trading Psychology: 7 Keys to Successful Trading

May 22, 2023
3k

Comments 13

  1. Sreenivas Gandla says:
    3 years ago

    Basic and very essential knowledge about chart patterns, explained easily and briefly.

    Reply
  2. Raju KVSS says:
    2 years ago

    Excellent teaching of Chart Patterns

    Reply
    • Sakshi Agarwal says:
      2 years ago

      Hi,

      Thank you for Reading!

      Keep Reading!

      Reply
  3. Sandeep Ningappa Pujari says:
    1 year ago

    HI, SIR,
    AWESOME TEACHING OF CHART PATTERNS
    THANK YOU VERY MUCH😃👌🏻

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      We really appreciated that you liked our blog! Thank you for your feedback!

      Keep Reading!

      Reply
  4. Praveen says:
    1 year ago

    Hi Sakshi,
    Awesome. Explained very simple way and in detail. Thanks a lot!
    Thank you,
    Praveen

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      We really appreciated that you liked our blog!

      Thank you for Reading!

      Keep Reading!

      Reply
  5. Jayaprasad says:
    1 year ago

    Very good

    Reply
    • Sakshi Agarwal says:
      1 year ago

      Hi,

      We really appreciated that you liked our blog!

      Thank you for Reading!

      Keep Reading!

      Reply
  6. Saiteja says:
    7 months ago

    Nice explanation. Is there any technical indicators we can use along with chart patterns for trading

    Reply
  7. Ram Shankar Das says:
    6 months ago

    very good information

    Reply
  8. Pradeep says:
    4 months ago

    Excellent. the way the diagrams r n the way they r explained. but chart patterns r one of the tough things to do during live trading. if that can be shared it ll be of great help.

    Reply
  9. JK says:
    3 months ago

    THANKS FOR ALL THE INFO AND GOOD ONE WAS YOU HAVE COLLECTED ALL PATTERN IN REAL TRADE AND SHOWN US RELAY APPRECIATE YOUR WORK WOULD LIKE TO KNOW MORE ABOUT THIS

    Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Follow Us

Facebook-f Twitter Instagram Linkedin-in Youtube Telegram

Register on Elearnmarkets

Continue your financial learning by creating your own account on Elearnmarkets.com

Register Free Account

Download App

Categories

  • Basic Finance
  • Derivatives
  • Financial Planning
  • Fundamental Analysis
  • Technical Analysis
  • Marketshala
  • Miscellaneous

Popular On Elearnmarkets

  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Market Superheroes:
  • Vivek Bajaj
  • Chetan Panchamia
  • Ashish Kyal
  • Premal Parekh
  • Abhijit Paul
  • Jegan
  • Sivakumar Jayachadran
  • Vishal Malkan
  • Jyoti Budhia
  • Vivek Gadodia
  • Vishal Mehta
  • Piyush Chaudhry
  • Santosh Pasi
  • Gomathi Shankar
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Courses:​
  • Options Trading
  • Dow Theory
  • Momentum Trading
  • Stock Investing
  • Stock Market for Beginners
  • Harmonic Chart Patterns
  • Algo Trading
  • Elliot Wave Theory
  • Advanced Excel
  • Cryptocurrency
  • NSE Certification Course
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Webinars:
  • Bank Nifty Scalping
  • Intraday Trading Strategies
  • Options Trading Strategies
  • Options selling
  • Price Action
  • Relative Strength
  • Tax Planning
  • Options Buying
  • Growth Stocks
  • Portfolio Management
  • Relative Strength Index
  • Risk Management
  • Renko Charts
  • Crude Oil
  • Traders Psychology
  • Moving Average
  • Multibagger Stocks
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Free Learning Modules:
  • Intraday Trading
  • Options Scalping
  • Swing Trading
  • Financial Modelling
  • RSI Indicator
  • Bollinger Bands
  • Pricing of Futures
  • Personal Finance
  • Initial Public Offerings (IPO)
  • Value Investing
  • Technical Indicators
  • Candlesticks
  • Chart Patterns
  • Option Greeks
  • ELSS Funds
  • Banking and Insurance
  • Real Estate
  • Gold
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Book Summaries:
  • Rich Dad Poor Dad
  • Psychology of Money
  • The Intelligent Investor
  • The Richest Man in Babylon
  • Think and Trade Like a Champion
  • Value Investing and Behavioural Finance
  • Trading in the Zone
  • Learn to Earn
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati
  • Tools:
  • CAGR Calculator
  • SIP Calculator
  • eLearnOptions
  • Future Value Calculator
  • Present Value Calculator
  • Atal Pension Yojana
  • Cost of Delay Calculator
  • Become a Crorepati

© 2023 Elearnmarkets. All Rights Reserved

  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling
  • Visit Elearnmarkets
  • Courses
  • Webinars
  • Financial Guides
  • Get Free Counselling

Get Elearnmarkets App

No Result
View All Result
  • Article Categories
    • Basic Finance
    • Derivatives
    • Financial Planning
    • Fundamental Analysis
    • Technical Analysis
    • Marketshala
    • Miscellaneous
  • Language
    • Hindi
    • Bengali
    • English
  • Courses
  • Webinars

© 2020 Elearnmarkets All Rights Reserved