Chart patternBullish: Bull pennantBearish: Bear pennant
Pennant Pattern: How to Identify and Trade Bullish and Bearish Pennants
A strong move, then a small triangle that pauses it: the pennant. This guide covers the bull and bear versions, where the entry, stop and target go, and how breakouts did against chance.
How we tested this pattern
- Sample
- 1,487 occurrences on 6 markets (crypto, forex, US stocks, ETFs, indices and commodities), 1981 to 2026.
- Detection
- Found by code, never picked by hand: every match of the rule on full price history, winners and losers alike.bull pennant pattern: A rising pole (at least 3 ATR, at least 0.4 ATR per bar), then a small converging triangle (falling upper line, rising lower line, final width at most 60% of the initial one) that retraces at most 50% of the pole, lasts at most 1.5 times the pole and keeps every close within 10% of its height from its lines. At least 3 bars between swing points, breakout within half the pennant duration. The standard grade widens this: pole up to 60 bars at 0.3 ATR per bar or more, a pullback of up to 60% of the pole lasting up to 2 times the pole, a breakout within 0.75 of the duration. The pole starts from a true low: over the pole's duration before it, price never fell more than 10% of the pole below its start.bear pennant pattern: A falling pole (at least 3 ATR, at least 0.4 ATR per bar), then a small converging triangle (falling upper line, rising lower line, final width at most 60% of the initial one) that retraces at most 50% of the pole, lasts at most 1.5 times the pole and keeps every close within 10% of its height from its lines. At least 3 bars between swing points, breakout within half the pennant duration. The standard grade widens this: pole up to 60 bars at 0.3 ATR per bar or more, a pullback of up to 60% of the pole lasting up to 2 times the pole, a breakout within 0.75 of the duration. The pole starts from a true high: over the pole's duration before it, price never rose more than 10% of the pole above its start.
- Benchmark
- Each occurrence is compared with the same assets on random bars: the move 10 bars later, and a 2:1 reward-to-risk trade.
- Checks
- Block bootstrap and a correction for the thousands of tests we run, plus a random-walk self-test that the bench passes: on random prices, no pattern should win.
- Updated
- Data updated November 5, 2026, code version c2a1683f. Read the methodology · bull pennant pattern data (JSON) · bear pennant pattern data (JSON)
At a glance: what textbooks say, what we measured
- Pattern
- Bullish: Bull pennant
- Occurrences tested
- 754 occurrences, all markets, daily
- Textbook: price should rise after it
- Too close to call · +0.30% vs the market, 10 bars
- Textbook: target reached most of the time
- 22.3% vs 24.0% on random dates, all markets, daily, upward breakouts
- Its best market and timeframe, still negative, US stocks left out
- Crypto, 1-hour, upward breakouts: −0.06 R 2:1 trade vs random dates, not proven
- Verdict
- 10-bar move: No clear edge2:1 trade: No clear edge
- Pattern
- Bearish: Bear pennant
- Occurrences tested
- 733 occurrences, all markets, daily
- Textbook: price should fall after it
- Too close to call · −0.02% vs the market, 10 bars
- Textbook: target reached most of the time
- 9.9% vs 9.7% on random dates, all markets, daily, downward breakouts
- Where it did best
- Crypto, 1-hour, downward breakouts: +0.11 R 2:1 trade vs random dates, not proven
- Verdict
- 10-bar move: No clear edge2:1 trade: No clear edge
On this page
- What is a pennant pattern in technical analysis?
- Key characteristics of a pennant chart pattern
- Bullish vs. bearish pennant patterns
- How to identify a pennant pattern on a chart
- Pennant pattern vs. flag pattern: what is the difference?
- Pennant pattern vs. triangle patterns
- The psychology behind pennant formations
- How to trade pennant pattern setups
- Reliability: what happened after the breakout
- Real examples from our test bench
- Pennant trading strategies
- Advanced tips for trading pennant breakouts
- Common mistakes to avoid when trading pennants
- Advantages of the pennant
- Limitations and risks of pennant trading
- Frequently asked questions
- Summary
The pennant pattern is a short continuation chart pattern: a strong price move (the flagpole), then a brief consolidation phase between two converging trendlines (the pennant), then a breakout in the direction of the initial move. A bullish pennant forms after a rally, a bearish one after a drop.
This guide explains how to identify a pennant on a price chart, how to set the entry, the stop and the exit, and what actually happened after the breakout on our test bench: 754 bullish and 733 bearish breakouts on daily data, plus thousands on intraday data, each compared with the same trade on random dates.
What is a pennant pattern in technical analysis?
In technical analysis, a pennant is a pause inside a strong trend. Price makes a fast, almost vertical move, then trades in a narrowing range of lower highs and rising lows for a short period, then the trend may continue. Robert Edwards and John Magee described flags and pennants together in Technical Analysis of Stock Trends (1948), and John Murphy classifies them as short-term continuation patterns in Technical Analysis of the Financial Markets (1999). The pattern forms on stock, forex and crypto charts, on any timeframe. In technical analysis terms, it belongs to the family of continuation chart patterns, like the flag and the rectangle, as opposed to reversal patterns such as the head and shoulders.
For a trader, the appeal is simple: the pattern gives a defined level to enter, a clear level for the stop, and a potential price target. Whether that gives an edge is a separate question, and our data answers it below in plain terms: the potential exists on paper, the measured edge does not.
Key characteristics of a pennant chart pattern
Every pennant chart pattern has three parts. The chart below is the median shape of the bullish patterns our bench detected, with the lines of the trade we test.
- Start of the pole
- End of the polerising pole
- Triangle low
- Lower highupper line falls
- Higher lowretraces at most 50% of the pole (60% at the standard grade)
- Breakoutthe pennant lasts at most 1.5 × the pole
- Start of the pole
- End of the polefalling pole
- Triangle high
- Higher lowlower line rises
- Lower highretraces at most 50% of the pole (60% at the standard grade)
- Breakoutthe pennant lasts at most 1.5 × the pole
The flagpole
The flagpole is the initial move: one strong swing up or down, clearly steeper than the price action before it. Its height is the basis of the classic price target, and its strength is what separates a pennant from an ordinary triangle.
The consolidation phase
The consolidation phase is a compact symmetrical triangle: a falling upper line and a rising lower line that meet ahead of price. In our detection rule, it retraces at most 50% of the pole and lasts at most 1.5 times its duration on a textbook pattern, 60% and twice its duration on the looser standard grade. The pole must also start from a real turning point: over one pole duration before it, price did not go beyond its base by more than 10% of the pole.
The breakout
The breakout occurs on the first close beyond the pennant in the direction of the pole. In our data most pennant patterns got there: 96.2% of daily bull pennant patterns and 96.3% of daily bear pennant patterns reached a breakout before the structure changed.
Bullish vs. bearish pennant patterns
Bullish pennant pattern explained
A bull pennant is a bullish continuation signal that follows a rally. Buyers pause, price compresses, and the expected exit is to the upside. On daily data, the bull version broke upward 754 times against 110 times downward, or 87.3% upward. That is not a result about the market: on random prices, in our three self-test worlds, 82.2 to 89.2% of bull pennants also exit upward. The side comes from the construction of the shape, so it predicts nothing.
Bearish pennant pattern explained
A bear pennant is the bearish continuation version: it follows a sharp drop. Sellers pause, price rebounds a little inside the narrowing lines, and the expected exit is downward. On daily data, the bearish version broke down 733 times against 183 times the other way, or 80.0% downward. Here too the side comes from the construction: on random prices, 79.9 to 89.2% of bear pennants also exit downward. It is especially frequent in crypto: 1,747 hourly breakdowns across 496 coins.
How to identify a pennant pattern on a chart
Confirming the prior trend
Look for the pole first. Without a strong, fast move before it, a tiny triangle is just a pause in a range, not a continuation pattern. The previous trend should be obvious at a glance.
Identifying converging trendlines
Draw a line across the highs of the consolidation and another across its lows. Here they converge: falling highs and rising lows. If they stay parallel, it is a flag; if the consolidation lasts much longer than the pole, it is closer to a full symmetrical triangle.
Analyzing volume during formation
The textbook rule is heavy volume on the pole, shrinking volume during the formation and a surge when price breaks out. We tested the breakout volume. On daily data, bull pennant patterns that broke out on volume above 1.5 times the 20-day average reached the 2:1 target in 33.7% of trades (n 184), against 38.6% on normal volume (n 559). The average result per trade was about the same, +0.19 R against +0.25 R: high volume did not help. The difference is small, descriptive and not corrected for multiple testing.
Pennant pattern vs. flag pattern: what is the difference?
Both start with a pole and both signal a continuation. The difference is the shape of the consolidation: converging lines for the pennant, parallel lines sloping against the trend for the flag. The trading strategy is the same, and so were the results. On daily data, the bull flag trade reached its 2:1 target in 31.8% of 1,104 trades against 33.7% on random dates, and the bull pennant in 37.3% of 748 trades against 35.1%: both trades read No clear edge.
Pennant pattern vs. triangle patterns
A pennant is a small triangle that follows a pole, like the flag follows one. A symmetrical triangle is larger, lasts longer and needs no pole. Ascending and descending triangles have one flat side, at a support or resistance level. A wedge has two lines sloping in the same direction, while the lines of a pennant slope toward each other.
The psychology behind pennant formations
In the classic account, after a sharp move, early buyers take profit and late ones hesitate to chase. The range narrows and price movement shrinks; the textbook adds drying volume, which we did not test inside the pattern. In that reading, the pennant is a vote of confidence in the trend: the side that created the pole is resting, not leaving. The breakout is the sign that it is back in control, or the first sign that it is not.
How to trade pennant pattern setups
The classic pennant trading strategy enters on the breakout, places the stop on the other side of the pattern and sets the exit from the pole or as a multiple of the stop distance. This is the trade our bench simulates on every occurrence.
Key points before trading a pennant
- The initial move is a strong pole, not a slow drift.
- The formation is short, and its upper and lower lines converge.
- Confirmation comes from a close beyond the line, not from an intraday spike.
- The stop and the size are set before the trade, so the risk is known.
- The potential profit to the next support or resistance level is at least twice the stop distance.
- Entry
- Close outside the lines, in the direction of the breakout
- Stop loss (SL)
- Below the pennant low for an upward breakout, above the pennant high for a downward one
- Target (TP)
- Twice the risk (2:1)
- Entry
- Close outside the lines, in the direction of the breakout
- Stop loss (SL)
- Below the pennant low for an upward breakout, above the pennant high for a downward one
- Target (TP)
- Twice the risk (2:1)
A clean case from our bench: US stocksChosen on its shape alone, never on the outcome. Stock prices are adjusted for splits and dividends, so they can differ from the prices quoted at the time.
A clean case from our bench: US stocksChosen on its shape alone, never on the outcome. Stock prices are adjusted for splits and dividends, so they can differ from the prices quoted at the time.
Step 1: verifying the flagpole
Check that the pole is a single strong move, steeper than the trend before it.
Step 2: monitoring volume contraction
Watch for quieter trading inside the pattern. In the textbook reading (Edwards and Magee), shrinking volume is a sign that the counter-trend side is weak. We did not test volume inside the pattern; our volume test covers the breakout only, and it showed a small difference.
Step 3: setting your entry point
Step 4: placing a strategic stop-loss
Place the stop on the other side of the pattern: below its low when buying, above its high when selling. Size the position on that distance, so that a stopped trade costs a small, fixed share of the account.
Step 5: calculating price targets
The measured move projects the height of the pole from the breakout point. Another target is a fixed reward of twice the stop distance, and our statistics use that 2:1 target. On daily bull pennant patterns, winning trades reached it after a median of 29 bars; losing trades hit the stop after a median of 17 bars.
Reliability: what happened after the breakout
The pennant is not reliable on its own: on no market and timeframe with enough data did the breakout trade beat the same trade on random dates after our correction. On hourly crypto, the bear pennant did better, rated No clear edge, and the bull pennant did slightly worse, rated No clear edge: neither gap passes our statistical test. Here are the numbers from the statistical analysis of our test bench.
On upward breakouts: moved the expected way 10 bars later, compared with random bars.
Measured on 754 daily bull pennant occurrences with upward breakouts across 566 assets. Random bars on the same assets are the honest baseline.
No clear edgeOn downward breakouts: moved the expected way 10 bars later, compared with random bars.
Measured on 733 daily bear pennant occurrences with downward breakouts across 599 assets. Random bars on the same assets are the honest baseline.
No clear edgeBull pennant against random bars on the same assets, by market, on daily candles. Bars of almost the same length mean no edge.
- All markets
- US stocks
- ETFs
- All markets
- US stocks
- ETFs
Bear pennant against random bars on the same assets, by market, on daily candles. Bars of almost the same length mean no edge.
- All markets
- Crypto
- US stocks
- All markets
- Crypto
- US stocks
All statistics
Full results for the pennant pattern, market by market
Every occurrence our rule finds on full price history, compared with what the same assets did on random bars. A pattern only earns an edge if it beats random entries after correcting for the thousands of tests we run.
Our verdict
Not a reliable signal on its own here. Use it as context, not as a trigger.
Bull pennant: 754 occurrences tested
Bullish pattern · All markets · Daily · Upward breakout · 566 assets · 1981-02 to 2026-10
What this means. No measurable difference from the rest of its market over the next 10 bars.
Timeline
- Pattern length, first swing to breakout
- 43 days · middle half 34 to 52 · on 754 occurrences
- Breakout, after the last swing
- 0 days · middle half 0 to 1 · on 754 occurrences
- Time to the 2:1 target, when hit
- 29 days · middle half 16 to 49 · on 279 trades that hit it
- Time to the stop, when hit
- 17 days · middle half 8 to 35 · on 408 trades that hit it
- Time in the trade, all exits
- 25 days · middle half 12 to 50 · on 748 trades
- Measured-move target reached, when hit
- 38 days · middle half 21 to 63 · on the occurrences that reached it
- Pattern height projected from the breakout
Size and trade path
- Pattern height
- 21.0% · middle half 15.2% to 28.5% · on 754 occurrences
- Best open profit during the trade
- 1.29 R · middle half 0.40 R to 2.06 R · on 748 trades
- Stopped trades that were first up 1 R
- 21.1% · on 408 stopped trades
- Trades a stop moved to breakeven at +1 R would have closed flat instead of at a loss
Medians, each on the cases named on its line; "middle half" spans the 25th to 75th percentile; no value under 30 cases.
How we detect it. A rising pole (at least 3 ATR, at least 0.4 ATR per bar), then a small converging triangle (falling upper line, rising lower line, final width at most 60% of the initial one) that retraces at most 50% of the pole, lasts at most 1.5 times the pole and keeps every close within 10% of its height from its lines. At least 3 bars between swing points, breakout within half the pennant duration. The standard grade widens this: pole up to 60 bars at 0.3 ATR per bar or more, a pullback of up to 60% of the pole lasting up to 2 times the pole, a breakout within 0.75 of the duration. The pole starts from a true low: over the pole's duration before it, price never fell more than 10% of the pole below its start.
All measurements (30 rows)
10-bar move: did price go the expected way?
| Market | Occurrences | Pattern | Random bars | Excess | 10-bar move verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 1,020 | 43.6% | 48.4% | −0.01% | No clear edge |
| Crypto · 1-hour · Downward breakout | 243 | 51.9% | 50.7% | −0.13% | No clear edge |
| Forex · 1-hour · Upward breakout | 172 | 51.2% | 50.7% | −0.03% | No clear edge |
| Forex · 1-hour · Downward breakout | 29 | 62.1% | 49.2% | +0.14% | Not enough data |
| All markets · 1-hour · Upward breakout | 1,192 | 44.7% | 48.8% | −0.01% | No clear edge |
| All markets · 1-hour · Downward breakout | 272 | 52.9% | 50.5% | −0.10% | No clear edge |
| Crypto · 4-hour · Upward breakout | 175 | 49.1% | 48.0% | +0.17% | No clear edge |
| Crypto · 4-hour · Downward breakout | 34 | 67.6% | 51.7% | +0.29% | No clear edge |
| Forex · 4-hour · Upward breakout | 30 | 30.0% | 50.8% | −0.21% | No clear edge |
| Forex · 4-hour · Downward breakout | 6 | 66.7% | 48.7% | +0.23% | Not enough data |
| All markets · 4-hour · Upward breakout | 205 | 46.3% | 48.4% | +0.11% | No clear edge |
| All markets · 4-hour · Downward breakout | 40 | 67.5% | 51.2% | +0.28% | No clear edge |
| Crypto · Daily · Upward breakout | 11 | 36.4% | 47.7% | +6.12% | Not enough data |
| US stocks · Daily · Upward breakout | 675 | 56.6% | 54.3% | +0.24% | No clear edge |
| US stocks · Daily · Downward breakout | 108 | 48.1% | 45.2% | −0.64% | No clear edge |
| ETFs · Daily · Upward breakout | 32 | 56.3% | 56.7% | +0.08% | No clear edge |
| Indices · Daily · Upward breakout | 24 | 79.2% | 57.7% | +0.21% | Not enough data |
| Forex · Daily · Upward breakout | 7 | 42.9% | 52.1% | −0.82% | Not enough data |
| Forex · Daily · Downward breakout | 2 | 50.0% | 50.6% | +1.18% | Not enough data |
| Commodities · Daily · Upward breakout | 5 | 20.0% | 47.8% | −1.04% | Not enough data |
| All markets · Daily · Upward breakout | 754 | 56.6% | 54.3% | +0.30% | No clear edge |
| All markets · Daily · Downward breakout | 110 | 48.2% | 45.3% | −0.61% | No clear edge |
| US stocks · Weekly · Upward breakout | 73 | 63.0% | 57.5% | −0.04% | No clear edge |
| US stocks · Weekly · Downward breakout | 17 | 29.4% | 44.2% | −1.98% | Not enough data |
| ETFs · Weekly · Upward breakout | 5 | 60.0% | 61.5% | +0.40% | Not enough data |
| Indices · Weekly · Upward breakout | 3 | 100.0% | 61.6% | +1.87% | Not enough data |
| Forex · Weekly · Upward breakout | 3 | 33.3% | 50.6% | −2.24% | Not enough data |
| Forex · Weekly · Downward breakout | 1 | 100.0% | 47.9% | +2.70% | Not enough data |
| All markets · Weekly · Upward breakout | 84 | 63.1% | 57.7% | −0.02% | No clear edge |
| All markets · Weekly · Downward breakout | 18 | 33.3% | 44.4% | −1.72% | Not enough data |
2:1 trade: target hit and average result
| Market | Trades | Target hit | Same trade, random dates | Per trade | 2:1 trade verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 1,020 | 27.3% | 27.8% | −0.09 R vs −0.03 R | No clear edge |
| Crypto · 1-hour · Downward breakout | 242 | 24.8% | 24.0% | +0.03 R vs +0.04 R | No clear edge |
| Forex · 1-hour · Upward breakout | 171 | 29.2% | 29.8% | −0.06 R vs +0.04 R | No clear edge |
| Forex · 1-hour · Downward breakout | 29 | 31.0% | 26.7% | +0.06 R vs +0.01 R | Not enough data |
| All markets · 1-hour · Upward breakout | 1,191 | 27.5% | 28.1% | −0.09 R vs −0.02 R | No clear edge |
| All markets · 1-hour · Downward breakout | 271 | 25.5% | 24.3% | +0.03 R vs +0.03 R | No clear edge |
| Crypto · 4-hour · Upward breakout | 175 | 30.3% | 32.0% | −0.04 R vs +0.05 R | No clear edge |
| Crypto · 4-hour · Downward breakout | 34 | 29.4% | 22.8% | +0.20 R vs +0.02 R | No clear edge |
| Forex · 4-hour · Upward breakout | 29 | 13.8% | 35.3% | −0.33 R vs +0.26 R | Not enough data |
| Forex · 4-hour · Downward breakout | 6 | 33.3% | 29.2% | +0.25 R vs +0.03 R | Not enough data |
| All markets · 4-hour · Upward breakout | 204 | 27.9% | 32.5% | −0.08 R vs +0.08 R | No clear edge |
| All markets · 4-hour · Downward breakout | 40 | 30.0% | 23.8% | +0.20 R vs +0.02 R | No clear edge |
| Crypto · Daily · Upward breakout | 11 | 45.5% | 34.1% | +0.56 R vs +0.08 R | Not enough data |
| US stocks · Daily · Upward breakout | 674 | 36.6% | 34.9% | +0.21 R vs +0.17 R | No clear edge |
| US stocks · Daily · Downward breakout | 108 | 19.4% | 19.1% | −0.22 R vs −0.25 R | No clear edge |
| ETFs · Daily · Upward breakout | 30 | 40.0% | 30.0% | +0.38 R vs −0.02 R | No clear edge |
| Indices · Daily · Upward breakout | 23 | 47.8% | 50.4% | +0.48 R vs +0.61 R | Not enough data |
| Forex · Daily · Upward breakout | 6 | 16.7% | 25.0% | −0.50 R vs −0.08 R | Not enough data |
| Forex · Daily · Downward breakout | 2 | 0.0% | 62.5% | −1.00 R vs +0.88 R | Not enough data |
| Commodities · Daily · Upward breakout | 4 | 75.0% | 43.8% | +1.87 R vs +0.32 R | Not enough data |
| All markets · Daily · Upward breakout | 748 | 37.3% | 35.1% | +0.23 R vs +0.17 R | No clear edge |
| All markets · Daily · Downward breakout | 110 | 19.1% | 19.8% | −0.23 R vs −0.23 R | No clear edge |
| US stocks · Weekly · Upward breakout | 73 | 39.7% | 40.1% | +0.43 R vs +0.36 R | No clear edge |
| US stocks · Weekly · Downward breakout | 16 | 25.0% | 23.4% | −0.24 R vs −0.22 R | Not enough data |
| ETFs · Weekly · Upward breakout | 5 | 60.0% | 55.0% | +0.80 R vs +0.65 R | Not enough data |
| Indices · Weekly · Upward breakout | 3 | 100.0% | 75.0% | +2.00 R vs +1.25 R | Not enough data |
| Forex · Weekly · Upward breakout | 3 | 0.0% | 25.0% | −1.00 R vs −0.15 R | Not enough data |
| Forex · Weekly · Downward breakout | 0 | n/a | n/a | n/a vs n/a | Not enough data |
| All markets · Weekly · Upward breakout | 84 | 41.7% | 41.7% | +0.45 R vs +0.39 R | No clear edge |
| All markets · Weekly · Downward breakout | 16 | 25.0% | 23.4% | −0.24 R vs −0.22 R | Not enough data |
After the breakout
| Market | Occurrences | False starts | Same, random dates | Throwbacks |
|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 1,020 | 59.4% | 55.8% | 67.2% |
| Crypto · 1-hour · Downward breakout | 243 | 48.3% | 49.4% | 70.8% |
| Forex · 1-hour · Upward breakout | 172 | 62.9% | 55.8% | 57.3% |
| Forex · 1-hour · Downward breakout | 29 | 55.2% | 54.3% | 55.2% |
| All markets · 1-hour · Upward breakout | 1,192 | 59.9% | 55.8% | 65.7% |
| All markets · 1-hour · Downward breakout | 272 | 49.1% | 49.9% | 69.1% |
| Crypto · 4-hour · Upward breakout | 175 | 58.3% | 54.6% | 68.0% |
| Crypto · 4-hour · Downward breakout | 34 | 47.1% | 49.3% | 70.6% |
| Forex · 4-hour · Upward breakout | 30 | 60.7% | 43.3% | 70.0% |
| Forex · 4-hour · Downward breakout | 6 | 33.3% | 43.1% | 50.0% |
| All markets · 4-hour · Upward breakout | 205 | 58.6% | 53.0% | 68.3% |
| All markets · 4-hour · Downward breakout | 40 | 45.0% | 48.3% | 67.5% |
| Crypto · Daily · Upward breakout | 11 | 27.3% | 50.0% | 54.5% |
| US stocks · Daily · Upward breakout | 675 | 51.7% | 52.5% | 68.1% |
| US stocks · Daily · Downward breakout | 108 | 61.7% | 59.9% | 70.4% |
| ETFs · Daily · Upward breakout | 32 | 37.9% | 53.9% | 70.0% |
| Indices · Daily · Upward breakout | 24 | 39.1% | 38.5% | 56.5% |
| Forex · Daily · Upward breakout | 7 | 83.3% | 50.0% | 66.7% |
| Forex · Daily · Downward breakout | 2 | 0.0% | 25.0% | 0.0% |
| Commodities · Daily · Upward breakout | 5 | 0.0% | 43.8% | 75.0% |
| All markets · Daily · Upward breakout | 754 | 50.3% | 52.0% | 67.7% |
| All markets · Daily · Downward breakout | 110 | 61.1% | 59.2% | 69.1% |
| US stocks · Weekly · Upward breakout | 73 | 43.1% | 43.5% | 61.6% |
| US stocks · Weekly · Downward breakout | 17 | 56.3% | 55.9% | 81.3% |
| ETFs · Weekly · Upward breakout | 5 | 40.0% | 35.0% | 20.0% |
| Indices · Weekly · Upward breakout | 3 | 0.0% | 25.0% | 66.7% |
| Forex · Weekly · Upward breakout | 3 | 100.0% | 66.7% | 100.0% |
| Forex · Weekly · Downward breakout | 1 | n/a | 50.0% | n/a |
| All markets · Weekly · Upward breakout | 84 | 43.4% | 43.2% | 60.7% |
| All markets · Weekly · Downward breakout | 18 | 56.3% | 55.6% | 81.3% |
Our verdict
Not a reliable signal on its own here. Use it as context, not as a trigger.
Bear pennant: 733 occurrences tested
Bearish pattern · All markets · Daily · Downward breakout · 599 assets · 1981-02 to 2026-10
What this means. No measurable difference from the rest of its market over the next 10 bars.
Timeline
- Pattern length, first swing to breakout
- 44 days · middle half 35 to 54 · on 733 occurrences
- Breakout, after the last swing
- 0 days · middle half 0 to 1 · on 733 occurrences
- Time to the 2:1 target, when hit
- 27 days · middle half 16 to 52 · on 163 trades that hit it
- Time to the stop, when hit
- 19 days · middle half 9 to 34 · on 428 trades that hit it
- Time in the trade, all exits
- 25 days · middle half 12 to 62 · on 694 trades
- Measured-move target reached, when hit
- 33 days · middle half 18 to 53 · on the occurrences that reached it
- Pattern height projected from the breakout
Size and trade path
- Pattern height
- 38.0% · middle half 21.1% to 77.3% · on 733 occurrences
- Best open profit during the trade
- 0.84 R · middle half 0.27 R to 1.91 R · on 694 trades
- Stopped trades that were first up 1 R
- 18.7% · on 428 stopped trades
- Trades a stop moved to breakeven at +1 R would have closed flat instead of at a loss
Medians, each on the cases named on its line; "middle half" spans the 25th to 75th percentile; no value under 30 cases.
How we detect it. A falling pole (at least 3 ATR, at least 0.4 ATR per bar), then a small converging triangle (falling upper line, rising lower line, final width at most 60% of the initial one) that retraces at most 50% of the pole, lasts at most 1.5 times the pole and keeps every close within 10% of its height from its lines. At least 3 bars between swing points, breakout within half the pennant duration. The standard grade widens this: pole up to 60 bars at 0.3 ATR per bar or more, a pullback of up to 60% of the pole lasting up to 2 times the pole, a breakout within 0.75 of the duration. The pole starts from a true high: over the pole's duration before it, price never rose more than 10% of the pole above its start.
All measurements (35 rows)
10-bar move: did price go the expected way?
| Market | Occurrences | Pattern | Random bars | Excess | 10-bar move verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 372 | 45.7% | 48.2% | −0.30% | Weak, below chance |
| Crypto · 1-hour · Downward breakout | 1,747 | 50.3% | 50.8% | +0.03% | No clear edge |
| Forex · 1-hour · Upward breakout | 31 | 51.6% | 50.7% | +0.05% | No clear edge |
| Forex · 1-hour · Downward breakout | 144 | 47.2% | 49.2% | −0.01% | No clear edge |
| All markets · 1-hour · Upward breakout | 403 | 46.2% | 48.4% | −0.27% | Weak, below chance |
| All markets · 1-hour · Downward breakout | 1,891 | 50.1% | 50.7% | +0.02% | No clear edge |
| Crypto · 4-hour · Upward breakout | 144 | 44.4% | 47.3% | +0.32% | No clear edge |
| Crypto · 4-hour · Downward breakout | 784 | 48.1% | 52.4% | −0.25% | No clear edge |
| Forex · 4-hour · Upward breakout | 5 | 40.0% | 50.4% | −0.13% | Not enough data |
| Forex · 4-hour · Downward breakout | 40 | 56.4% | 49.0% | +0.21% | No clear edge |
| All markets · 4-hour · Upward breakout | 149 | 44.3% | 47.4% | +0.30% | No clear edge |
| All markets · 4-hour · Downward breakout | 824 | 48.5% | 52.2% | −0.23% | No clear edge |
| Crypto · Daily · Upward breakout | 31 | 38.7% | 45.9% | +1.57% | No clear edge |
| Crypto · Daily · Downward breakout | 154 | 57.1% | 55.3% | +0.30% | No clear edge |
| US stocks · Daily · Upward breakout | 136 | 50.0% | 54.1% | −0.03% | No clear edge |
| US stocks · Daily · Downward breakout | 555 | 49.4% | 46.2% | −0.07% | No clear edge |
| ETFs · Daily · Upward breakout | 9 | 44.4% | 57.6% | −0.39% | Not enough data |
| ETFs · Daily · Downward breakout | 9 | 44.4% | 45.4% | −0.21% | Not enough data |
| Indices · Daily · Upward breakout | 4 | 25.0% | 59.6% | +1.86% | Not enough data |
| Indices · Daily · Downward breakout | 6 | 66.7% | 45.8% | −1.10% | Not enough data |
| Forex · Daily · Upward breakout | 2 | 50.0% | 53.3% | +1.82% | Not enough data |
| Forex · Daily · Downward breakout | 5 | 80.0% | 48.9% | +0.12% | Not enough data |
| Commodities · Daily · Upward breakout | 1 | 0.0% | 54.2% | −0.05% | Not enough data |
| Commodities · Daily · Downward breakout | 4 | 25.0% | 47.6% | −4.44% | Not enough data |
| All markets · Daily · Upward breakout | 183 | 47.0% | 53.0% | +0.28% | No clear edge |
| All markets · Daily · Downward breakout | 733 | 51.2% | 48.1% | −0.02% | No clear edge |
| Crypto · Weekly · Upward breakout | 1 | 0.0% | 38.2% | −29.11% | Not enough data |
| Crypto · Weekly · Downward breakout | 16 | 81.3% | 62.4% | +5.03% | Not enough data |
| US stocks · Weekly · Upward breakout | 8 | 50.0% | 56.9% | +1.45% | Not enough data |
| US stocks · Weekly · Downward breakout | 72 | 57.7% | 45.0% | +4.97% | Promising |
| ETFs · Weekly · Downward breakout | 1 | 100.0% | 47.8% | +5.09% | Not enough data |
| Forex · Weekly · Downward breakout | 3 | 0.0% | 45.6% | −3.46% | Not enough data |
| Commodities · Weekly · Downward breakout | 3 | 66.7% | 49.1% | −10.81% | Not enough data |
| All markets · Weekly · Upward breakout | 9 | 44.4% | 54.9% | −1.95% | Not enough data |
| All markets · Weekly · Downward breakout | 95 | 60.6% | 48.1% | +4.21% | Promising |
2:1 trade: target hit and average result
| Market | Trades | Target hit | Same trade, random dates | Per trade | 2:1 trade verdict |
|---|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 371 | 29.4% | 24.7% | +0.08 R vs 0.00 R | No clear edge |
| Crypto · 1-hour · Downward breakout | 1,744 | 30.0% | 24.3% | +0.12 R vs +0.01 R | No clear edge |
| Forex · 1-hour · Upward breakout | 31 | 25.8% | 29.0% | +0.01 R vs +0.10 R | No clear edge |
| Forex · 1-hour · Downward breakout | 144 | 24.3% | 28.6% | −0.10 R vs +0.03 R | No clear edge |
| All markets · 1-hour · Upward breakout | 402 | 29.1% | 25.0% | +0.07 R vs +0.01 R | No clear edge |
| All markets · 1-hour · Downward breakout | 1,888 | 29.6% | 24.6% | +0.11 R vs +0.01 R | No clear edge |
| Crypto · 4-hour · Upward breakout | 143 | 25.9% | 23.1% | −0.02 R vs −0.04 R | No clear edge |
| Crypto · 4-hour · Downward breakout | 779 | 25.4% | 23.5% | +0.03 R vs +0.05 R | No clear edge |
| Forex · 4-hour · Upward breakout | 5 | 60.0% | 45.0% | +0.80 R vs +0.40 R | Not enough data |
| Forex · 4-hour · Downward breakout | 39 | 23.1% | 30.1% | −0.08 R vs +0.11 R | No clear edge |
| All markets · 4-hour · Upward breakout | 148 | 27.0% | 23.9% | +0.01 R vs −0.02 R | No clear edge |
| All markets · 4-hour · Downward breakout | 818 | 25.3% | 23.8% | +0.02 R vs +0.06 R | No clear edge |
| Crypto · Daily · Upward breakout | 31 | 25.8% | 38.7% | −0.20 R vs +0.23 R | No clear edge |
| Crypto · Daily · Downward breakout | 132 | 23.5% | 19.8% | +0.14 R vs +0.07 R | No clear edge |
| US stocks · Daily · Upward breakout | 134 | 26.9% | 33.6% | +0.01 R vs +0.27 R | No clear edge |
| US stocks · Daily · Downward breakout | 538 | 22.9% | 21.1% | −0.17 R vs −0.18 R | No clear edge |
| ETFs · Daily · Upward breakout | 9 | 22.2% | 22.2% | −0.02 R vs −0.09 R | Not enough data |
| ETFs · Daily · Downward breakout | 9 | 22.2% | 25.0% | −0.02 R vs −0.01 R | Not enough data |
| Indices · Daily · Upward breakout | 4 | 25.0% | 25.0% | −0.25 R vs −0.26 R | Not enough data |
| Indices · Daily · Downward breakout | 6 | 50.0% | 16.7% | +0.49 R vs −0.47 R | Not enough data |
| Forex · Daily · Upward breakout | 1 | 0.0% | 25.0% | +0.07 R vs −0.05 R | Not enough data |
| Forex · Daily · Downward breakout | 5 | 80.0% | 30.0% | +1.40 R vs +0.01 R | Not enough data |
| Commodities · Daily · Upward breakout | 1 | 0.0% | 50.0% | −1.00 R vs +0.67 R | Not enough data |
| Commodities · Daily · Downward breakout | 4 | 0.0% | 12.5% | −0.50 R vs −0.49 R | Not enough data |
| All markets · Daily · Upward breakout | 180 | 26.1% | 33.8% | −0.04 R vs +0.23 R | Weak, below chance |
| All markets · Daily · Downward breakout | 694 | 23.5% | 20.8% | −0.09 R vs −0.14 R | No clear edge |
| Crypto · Weekly · Upward breakout | 1 | 100.0% | 25.0% | +2.00 R vs −0.25 R | Not enough data |
| Crypto · Weekly · Downward breakout | 0 | n/a | n/a | n/a vs n/a | Not enough data |
| US stocks · Weekly · Upward breakout | 7 | 42.9% | 60.7% | +0.31 R vs +0.94 R | Not enough data |
| US stocks · Weekly · Downward breakout | 61 | 24.6% | 14.2% | −0.02 R vs −0.29 R | No clear edge |
| ETFs · Weekly · Downward breakout | 1 | 0.0% | 0.0% | −0.14 R vs −1.00 R | Not enough data |
| Forex · Weekly · Downward breakout | 2 | 0.0% | 0.0% | −1.00 R vs −0.74 R | Not enough data |
| Commodities · Weekly · Downward breakout | 2 | 0.0% | 50.0% | +0.23 R vs +0.50 R | Not enough data |
| All markets · Weekly · Upward breakout | 8 | 50.0% | 56.3% | +0.52 R vs +0.79 R | Not enough data |
| All markets · Weekly · Downward breakout | 66 | 22.7% | 14.6% | −0.05 R vs −0.29 R | No clear edge |
After the breakout
| Market | Occurrences | False starts | Same, random dates | Throwbacks |
|---|---|---|---|---|
| Crypto · 1-hour · Upward breakout | 372 | 51.5% | 52.4% | 67.1% |
| Crypto · 1-hour · Downward breakout | 1,747 | 52.8% | 54.9% | 67.8% |
| Forex · 1-hour · Upward breakout | 31 | 53.3% | 53.2% | 80.6% |
| Forex · 1-hour · Downward breakout | 144 | 59.0% | 53.3% | 68.1% |
| All markets · 1-hour · Upward breakout | 403 | 51.6% | 52.5% | 68.2% |
| All markets · 1-hour · Downward breakout | 1,891 | 53.2% | 54.8% | 67.8% |
| Crypto · 4-hour · Upward breakout | 144 | 53.2% | 51.7% | 68.1% |
| Crypto · 4-hour · Downward breakout | 784 | 51.1% | 50.7% | 60.2% |
| Forex · 4-hour · Upward breakout | 5 | 40.0% | 45.0% | 80.0% |
| Forex · 4-hour · Downward breakout | 40 | 55.3% | 53.8% | 66.7% |
| All markets · 4-hour · Upward breakout | 149 | 52.7% | 51.5% | 68.5% |
| All markets · 4-hour · Downward breakout | 824 | 51.3% | 50.8% | 60.5% |
| Crypto · Daily · Upward breakout | 31 | 65.5% | 51.6% | 61.3% |
| Crypto · Daily · Downward breakout | 154 | 50.7% | 49.0% | 66.2% |
| US stocks · Daily · Upward breakout | 136 | 50.4% | 41.4% | 72.8% |
| US stocks · Daily · Downward breakout | 555 | 60.7% | 60.0% | 69.5% |
| ETFs · Daily · Upward breakout | 9 | 55.6% | 50.0% | 66.7% |
| ETFs · Daily · Downward breakout | 9 | 44.4% | 52.8% | 55.6% |
| Indices · Daily · Upward breakout | 4 | 75.0% | 68.8% | 75.0% |
| Indices · Daily · Downward breakout | 6 | 50.0% | 70.8% | 66.7% |
| Forex · Daily · Upward breakout | 2 | 0.0% | 25.0% | 100.0% |
| Forex · Daily · Downward breakout | 5 | 0.0% | 65.0% | 50.0% |
| Commodities · Daily · Upward breakout | 1 | 100.0% | 25.0% | 0.0% |
| Commodities · Daily · Downward breakout | 4 | 75.0% | 79.2% | 100.0% |
| All markets · Daily · Upward breakout | 183 | 53.7% | 43.9% | 70.5% |
| All markets · Daily · Downward breakout | 733 | 58.1% | 57.8% | 68.7% |
| Crypto · Weekly · Upward breakout | 1 | 0.0% | 66.7% | 100.0% |
| Crypto · Weekly · Downward breakout | 16 | 33.3% | 48.8% | 46.2% |
| US stocks · Weekly · Upward breakout | 8 | 50.0% | 33.3% | 28.6% |
| US stocks · Weekly · Downward breakout | 72 | 53.8% | 61.2% | 80.3% |
| ETFs · Weekly · Downward breakout | 1 | 0.0% | 100.0% | 100.0% |
| Forex · Weekly · Downward breakout | 3 | 100.0% | 50.0% | 0.0% |
| Commodities · Weekly · Downward breakout | 3 | 33.3% | 41.7% | 100.0% |
| All markets · Weekly · Upward breakout | 9 | 42.9% | 37.0% | 37.5% |
| All markets · Weekly · Downward breakout | 95 | 51.3% | 58.7% | 74.1% |
Data updated November 5, 2026 · code version c2a1683f · Read the methodology. We measure every pattern on crypto and forex (1-hour, 4-hour, daily and weekly charts) and US stocks, ETFs, indices and commodities (daily and weekly charts). A market or timeframe from that list missing from the tables above had no occurrence.
What you often read
“The bull pennant is a reliable bullish signal.”
What our data shows
On 754 daily occurrences with upward breakouts, it moved in the expected direction 56.6% of the time, against 54.3% for random bars: no clear edge, since the average excess return is not statistically significant.
What you often read
“The bear pennant is a reliable bearish signal.”
What our data shows
On 733 daily occurrences with downward breakouts, it moved in the expected direction 51.2% of the time, against 48.1% for random bars: no clear edge, since the average excess return is not statistically significant.
Table quoted in the text (verdicts and every market: see All measurements)
| Pattern, market and timeframe | Breakouts | Moved with the breakout 10 bars later | Random bars | Closed trades | 2:1 target hit | Same trade, random dates | Expectancy |
|---|---|---|---|---|---|---|---|
| Bull pennant, all markets, daily | 754 | 56.6% | 54.3% | 748 | 37.3% | 35.1% | +0.23 R |
| Bull pennant, US stocks, daily | 675 | 56.6% | 54.3% | 674 | 36.6% | 34.9% | +0.21 R |
| Bull pennant, all markets, hourly | 1,192 | 44.7% | 48.8% | 1,191 | 27.5% | 28.1% | −0.09 R |
| Bull pennant, forex, hourly | 172 | 51.2% | 50.7% | 171 | 29.2% | 29.8% | −0.06 R |
| Bear pennant, all markets, daily | 733 | 51.2% | 48.1% | 694 | 23.5% | 20.8% | −0.09 R |
| Bear pennant, all markets, 4-hour | 824 | 48.5% | 52.2% | 818 | 25.3% | 23.8% | +0.02 R |
| Bear pennant, crypto, hourly | 1,747 | 50.3% | 50.8% | 1,744 | 30.0% | 24.3% | +0.12 R |
| Bear pennant, forex, hourly | 144 | 47.2% | 49.2% | 144 | 24.3% | 28.6% | −0.10 R |
Read the table in pairs of columns. On daily data, 56.6% of bullish setups had risen 10 days after the breakout, against 54.3% for random days on the same assets. The excess return over the rest of the market was +0.30%, with a 95% confidence interval from −0.19% to +0.81%: zero is inside, so there is no clear edge. The 2:1 trade reached its target in 37.3% of 748 trades against 35.1% on random dates, with an expectancy of +0.23 R before costs against +0.17 R for the random trades.
Over 10 bars, the closest thing to a signal is the bear pennant on weekly data: an excess return of +4.21% after 10 bars (95% interval +1.03% to +6.62%), on only 95 breakouts. It passes a simple test but not our correction for the thousands of tests we run, so the row is rated promising, not a proven edge. On 4-hour data, the bear pennant showed no clear difference from chance. On hourly data, bull pennant patterns were followed by a rise in only 44.7% of cases, against 48.8% for random hours, but the average excess return (−0.01%) is within the margin of error.
On hourly crypto, the bear pennant trade had an expectancy of +0.12 R before costs, against +0.01 R for the same trade on random dates, rated no clear edge: the gap in average result per trade does not pass our statistical test, so it is not an established edge.
How often does it form?
Rarely, once a real pole is required: one bull pennant that broke up every 11,244 daily bars and one bear pennant that broke down every 11,566 daily bars across all markets.
Real examples from our test bench
The gallery in this section shows real pennants picked by our bench (best and worst results, textbook shapes, most recent, random draws), with their actual outcome. The case studies that follow are on daily crypto charts.
Real occurrences from our test bench, each on its market's main timeframe. Crypto examples come from liquid assets only (the largest coins). Best and Worst are the best and worst 2:1 trade results, Textbook the cleanest shapes (chosen on geometry alone, never on the outcome), Most recent the latest detections among the assets the gallery draws from, Typical a random draw. Shaded area: the pattern. Dashed lines: entry, stop loss (SL) and 2:1 target (TP) of the tested trade. Dotted line: 10 bars after the signal. A result above +2 R or below −1 R means a bar opened past the target or the stop, and the trade was closed at that open. From the bear pennant gallery, we left out 2 cards: 1 with a shape that does not read as the definition on this page, 1 with a single bar so large that the pattern or the trade levels could not be read. They still count in the statistics, and are not replaced: our bench picks a fixed number of cards per category.
Case study: a bear pennant that reached its target
XRP/USDT fell from 0.50999 on June 22, 2019, to 0.286 on July 16, then consolidated in a pennant. On August 8, 2019, it closed at 0.30825, below the pattern: entry there, stop above the pennant high at 0.34094, 2:1 target at 0.24287. XRP had fallen 8.1% 10 days after the breakout; it rebounded in mid-September without reaching the stop, and the target was hit on September 24, 2019.
Case study: a bear pennant caught by a market rebound
ADA/USDT fell from 0.6696 on June 8, 2022, to 0.4206 on June 18, then consolidated in a pennant. On July 11, 2022, it closed at 0.4347, below the pattern: entry there, stop above the pennant high at 0.526. Price rebounded instead: ADA was stopped on July 19, and ten days after the breakout it had gained 14.9%. ETC/USDT broke down from its own pennant the same day and was stopped on July 17. Patterns on correlated assets are not independent trades: one market move can stop them all.
Case study: a bull pennant that failed
On July 11, 2023, on the daily chart, POLYX/USDT closed at 0.1366 above a bull pennant, after a pole from 0.0982 to 0.1446 in about a week and a half. The stop below the pennant low was at 0.1176, and the 2:1 target at 0.1746. Price first went the right way: POLYX reached 0.1630 on July 14 and was still 0.9% higher 10 days after the breakout. Then it faded and fell through the stop on August 16, 2023. A close above the pattern is not a guarantee: the breakout can fail even after a good start.
Pennant trading strategies
Here are three pennant trading strategies. A pennant forms the same way in each; the points that change are the entry and the filter. Each one adds a rule that the pattern alone does not have, and each one should be tested before it is used with real money.
1. Entering on the breakout
The trader enters at the close beyond the pennant, with the stop on the other side and a target at twice the stop distance or at the measured move. This is the approach our bench tests on every occurrence, and its 2:1 trade showed no proven edge over chance in any market.
2. Waiting for a retest
The trader waits for price to come back to the broken line, which becomes support (or resistance for a bear pennant), and enters when it holds. The entry is better and the stop tighter, but not every breakout comes back: on daily charts, 67.7% of upward bull pennant breakouts came back within a quarter of an ATR of the broken line within the duration of the pattern, so a trader who waits skips the others. On the retests that filled, a limit order at the line (same stop, target at twice the new risk) averaged +0.22 R, against +0.06 R for the breakout entry on the same 498 patterns, a descriptive comparison not corrected for multiple testing.
3. Filtering with the higher timeframe
The trader takes only the setups in the direction of the higher timeframe, for example a bull pennant on a 4-hour chart while the daily chart is in an uptrend. It is a logical filter for continuation trading, but our own trend filter (the 200-day moving average) gave no tested edge on daily data.
Advanced tips for trading pennant breakouts
Best timeframes for pennant trading
No timeframe showed an edge after correction. Weekly bull pennant patterns reached the 2:1 target in 41.7% of 84 trades, against 41.7% for random weeks, on a small sample. In day trading and swing trading the result is the same: the timeframe changes the frequency, not the edge over random dates.
Using moving averages for confirmation
On daily data, bull pennant patterns above the 200-day moving average reached the 2:1 target in 36.7% of trades (n 645), and those below it in 41.8% (n 99). Setups below the average did better, but on a small sample and without correction for multiple testing.
Combining pennants with momentum indicators
The RSI or MACD can be added to confirm momentum on the breakout. We have not tested these indicators; check them on your own data before relying on them in your trading decisions.
Common mistakes to avoid when trading pennants
Trading during low volatility periods
A pennant in a quiet, directionless market has no pole and no trend to continue. In those conditions, the shape is noise.
Ignoring the preceding trend strength
The pole is the reason the pattern exists. A weak pole makes it an ordinary triangle with no clear direction.
Failing to wait for candle closure
Advantages of the pennant
- Easy to identify: a pole and two converging lines.
- A clear stop level on the other side of the pennant.
- On daily data, 754 bull pennant breakouts went up against 110 down, in line with the 82.2 to 89.2% upward share on random prices: the side comes from the construction, not from a signal.
- The same rules apply on stock, forex and crypto charts.
Limitations and risks of pennant trading
- No proven edge over random dates in our tests. The closest was the weekly bear pennant: 60.6% were lower 10 bars later against 48.1% for random bars, rated promising, not proven.
- Rare once a real pole is required.
- A breakout close can still fail: the stop goes below the pennant low when buying, above its high when selling.
- Correlated assets can print the same pattern on the same day.
- Like other chart patterns, it is easy to see in hindsight and harder to trade in real time; strategies built on the pattern alone showed no trading edge.
Frequently asked questions
How long does a typical pennant pattern last?
Shorter than a full triangle, relative to its pole: in our detection rule, the pattern lasts at most 1.5 times as long as its pole on a textbook pattern, twice as long on the looser standard grade, and a longer consolidation becomes a full triangle. On daily charts, the median bull pennant lasted 43 bars, pole included.
Is an inverted pennant pattern reliable?
The "inverted" pennant is another name used for the bear pennant. On daily data its 2:1 trade reached the target in 23.5% of 694 trades against 20.8% on random dates, with an expectancy of −0.09 R: no clear edge.
Can pennant patterns signal a reversal?
By definition, no: a pennant is a continuation pattern. A few break the other way (110 daily bull setups broke down, against 754 that broke up), about the share random prices give, and those cases are too few to trade as a signal.
Does the pennant work in all market conditions?
It needs a strong trend to form. In our data it showed no proven edge on the markets with enough cases: US stocks, ETFs, forex and crypto. Indices and commodities produced too few pennants to judge.
How do I confirm a breakout is not a false signal?
You cannot know in advance. Waiting for a close and placing the stop on the other side of the pattern limits the cost of a false breakout.
What is the role of volume in a pennant?
In the textbook reading (Edwards and Magee), volume shrinks during the consolidation and rises on the breakout. In our daily data, high-volume signals did not do better on the 2:1 trade (33.7% of targets hit against 38.6% on normal volume), a descriptive difference.
Can I use pennant patterns for crypto and forex trading?
Yes, they appear in both. On hourly crypto data, bear pennant patterns reached the 2:1 target in 30.0% of 1,744 trades against 24.3% on random dates; on hourly forex, bull pennant patterns in 29.2% of 171 trades against 29.8%, though their average result was below chance (−0.06 R against +0.04 R). Hourly forex bear pennants did worse: 24.3% against 28.6%, rated no clear edge. In none of these cases does the average result per trade pass our statistical test; the crypto one is also rated no clear edge.
What is the difference between a pennant and a wedge?
A pennant has converging lines that slope toward each other, after a pole. A wedge has two lines sloping in the same direction, and its definition does not require a pole.
How do professional traders manage risk with pennants?
A sound plan defines the stop before entry, sizes the position on that distance, and keeps the cost of each stopped trade modest. It also avoids holding many such trades on correlated assets at the same time.
Summary
- A pennant is a steep pole followed by a compact triangle; it is expected to break in the direction of the pole.
- Daily bull pennants broke up 754 times against 110 down, no more than the construction gives on random prices (82.2 to 89.2% upward).
- The daily bull pennant trade reached its 2:1 target in 37.3% of 748 trades, against 35.1% for the same trade on random dates: no clear edge.
- The best result, the weekly bear pennant, is rated promising on the move 10 bars later, not proven: it does not survive our correction.
- The bear pennant trade on hourly crypto looks better than random dates, but it is rated no clear edge.
As shown in this guide, pennant trading is a matter of discipline more than pattern recognition. Treat the pattern as a precise place to set a stop, not as a reason to expect profits. Past patterns help you learn the shape; they do not predict future moves, and past results do not guarantee future results. This page is educational information, not investment advice.
About the author and the data. Written by Amaury, founder of PatternsWizard, who is passionate about finance, quantitative trading and data analysis. He built the PatternsWizard test bench, which detects each setup with fixed, published rules on full market history: crypto, forex, US stocks, ETFs, indices and commodities. Trades and win rates are compared with random bars on the same assets, excess returns with the rest of the market, with error margins and a correction for multiple testing, and the whole pipeline is checked on random-walk prices, where nothing can be predicted. Statistics on this page were generated on November 5, 2026. The full methodology explains every step.
Passionate about finance, quantitative trading and data analysis. Amaury built the PatternsWizard test bench, which detects each pattern on full price history and measures what happened next against random entries.
Statistics on this page come from our open methodology: every occurrence our rule finds on full history, compared with chance. How we test patterns.