Common chart patterns worth knowing
Beyond single candles and levels, price tends to repeat a handful of recognisable shapes. You don't need to memorise dozens — a few cover most of what you'll actually see.
Double top and double bottom: price hits a level twice, fails to break it, and reverses. It looks like the letter M (double top, bearish) or W (double bottom, bullish).
Head and shoulders: three peaks, the middle one higher than the other two — often signals a trend running out of steam and about to reverse.
Triangles: price gets squeezed into a tighter and tighter range between two converging lines, usually before a bigger breakout in one direction.
These patterns aren't magic and they don't work every time — think of them as one more piece of evidence, the same way you'd treat a support level or a trend.
Volume, where you can see it, adds real weight to a pattern. A double top with strong selling volume on the second rejection is more convincing than one where volume just fades away — it suggests real selling pressure showed up, not just a random pause.
These patterns fail constantly, and that's normal, not a sign you're reading them wrong. Treat a pattern as one input alongside trend direction and a real support or resistance level, never the entire reason for a trade on its own.
Key takeaway
A handful of repeating shapes — double tops/bottoms, head and shoulders, triangles — cover most of what you'll actually see on a real chart.
Example
Gold forming two peaks at the same $2,680 level a few days apart, then dropping, is a textbook double top — the market tried that price twice and got rejected both times.
Try this
Scroll back through a few weeks of any chart and try to spot one double top or double bottom. You don't need to trade it — just find it.
This lesson is part of the free TDWK Academy — 40 lessons from zero to funded trader, with progress tracking and a certificate exam.
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