Chart Patterns

A pattern is a shape that price draws on a chart: a single candle, a short group of candles, or a structure of swing highs and lows such as a triangle or a head and shoulders. This section has a guide for 105 of them, in three families: candlestick patterns, classic chart patterns and harmonic patterns, plus a few setups that traders name on their own, such as the dead cat bounce or the Wolfe wave.

How every pattern is tested

Each guide on this page is backed by the same test bench. A pattern is written as a strict rule and searched for in the full price history of crypto, forex, stocks, ETFs, indices and commodities, using only what was known at the close of the signal bar. For every occurrence, the bench records whether price moved the expected way after 10 bars and compares that with random bars of the same asset. The verdict tests the excess return over the rest of the market. The bench also replays a simple trade, with a stop and a target at twice the risk, against the same trade on random dates.

Results are corrected for the number of tests run, and an edge on the main measure must point the same way in both halves of the history. The whole pipeline is also run on random-walk prices, where no pattern can work, and it must find no proven edge there before any number is published. Many well-known patterns do no better than random entries on this data, and their guides say so plainly.

The pattern statistics table on the home page compares every pattern on the same measures, and the methodology explains each step. To draw these shapes on your own charts, TradingView has dedicated drawing tools for several of them, including the head and shoulders, the triangle, the ABCD, the XABCD and the cypher (affiliate link).