Chart patterns describe where trapped traders are and where the pressure releases. Every pattern below comes with its real trigger level — because a pattern without a trigger and a stop is a story, not a trade.
Three pushes up where the middle one (the head) is highest and the third can't reach it — buyers making progressively less progress.
The trigger: The neckline: the support under both troughs. The pattern means nothing while price holds above it; the break (and often the retest from below) is the trade.
The mirror at a bottom: three pushes down, the middle deepest, the third failing to make a new low.
The trigger: Break of the neckline resistance. Depth of the head projected above the neckline is the textbook target — treat it as a sketch, not a promise.
Two failed attempts at the same high. The second test attracts breakout buyers who get trapped when it fails.
The trigger: The low between the two tops. Until that breaks, a “double top” is just resistance holding — and might be an accumulation range instead.
Two defenses of the same low — the second usually on visibly less selling pressure.
The trigger: Break of the swing high between the bottoms. Entering at the second low is earlier and cheaper, but it's a guess until that level breaks.
Flat resistance, rising support: sellers defend one price while buyers accept progressively worse ones. Pressure builds against the flat line.
The trigger: The breakout through the flat top. Statistically it resolves upward more often than not — “more often” still loses money without an exit plan for the times it doesn't.
Flat support, falling resistance — buyers defend one price while sellers accept progressively worse ones.
The trigger: The breakdown through the flat floor. In crypto these also produce vicious fake-downs before reversing; the stop placement matters more than the pattern.
A sharp advance (the pole), then a shallow, orderly drift down on declining volume (the flag) — profit-taking, not distribution.
The trigger: Break of the flag's upper boundary. The cleanest version: the flag retraces less than half the pole. A deep, choppy “flag” is just a downtrend wearing a costume.
Both trendlines slope down but they converge — each sell-off makes less progress than the last, momentum bleeding out of the decline.
The trigger: Break of the upper trendline. Wedges are slippery to define objectively — two traders will draw them differently, which is exactly why they're hard to backtest and easy to fool yourself with.
Chart patterns resist honest backtesting because recognizing one involves judgment — which makes them fertile ground for hindsight bias. On a historical chart you only see the patterns that worked; the failed head-and-shoulders got absorbed into other price action and your eye skips it. If you trade patterns, define them as rules (breakout above N-bar high, retrace under X% of the pole…) so the definition is the same in the backtest and at 3am. Then grade the rule.