Like we promised, here’s a neat little cheat sheet to help you remember all those chart patterns and what they are signaling.
We’ve listed the basic forex chart patterns, when they are formed, what type of signal they give, and what the next likely price move may be. Check it out!
| Chart Pattern | Forms During | Type of Signal | Next Move |
|---|---|---|---|
| Double Top | Uptrend | Reversal | Down |
| Double Bottom | Downtrend | Reversal | Up |
| Head and Shoulders | Uptrend | Reversal | Down |
| Inverse Head and Shoulders | Downtrend | Reversal | Up |
| Rising Wedge | Downtrend | Continuation | Down |
| Rising Wedge | Uptrend | Reversal | Down |
| Falling Wedge | Uptrend | Continuation | Up |
| Falling Wedge | Downtrend | Reversal | Up |
| Bearish Rectangle | Downtrend | Continuation | Down |
| Bullish Rectangle | Uptrend | Continuation | Up |
| Bearish Pennant | Downtrend | Continuation | Down |
| Bullish Pennant | Uptrend | Continuation | Up |
You also might want to add this page to your bookmarks in case you need to double-check those chart patterns’ signals before you risk your hard-earned cash on a trade.
You never know when you’re gonna need to cheat, hah! Bookmark this thing yo!
And as you probably noticed, we didn’t include the triangle formations (symmetrical, ascending, and descending) in this cheat sheet.
That’s because these chart patterns can form either in an uptrend or downtrend, and can signal either a continuation or reversal.
Confusing I know, but that’s where practice and experience come in!
As we mentioned, it’s tough to tell where the forex market will breakout or reverse.
So what’s important is that you prepare well and have your entry/exit orders ready so that you can be part of the action either way!
