Head & shoulders, cup & handle, wedges and channels: what each one says and how it's traded.
What does a head & shoulders signal? A bearish reversal. Three peaks, the middle one (the head) highest, all on a support line called the neckline. A confirmed break below the neckline says the uptrend has likely ended. Read the guide
How do you set a head & shoulders target? Measure from the top of the head to the neckline and project that distance down from the break. Head at 120, neckline at 100: target 80. Read the guide
What is an inverse head & shoulders? The bullish twin: three lows with the deepest in the middle. Sellers fail to make a new low on the right shoulder, and a confirmed break above the neckline means buyers are in control. Read the guide
Which neckline angles are best? Head & shoulders: flat or slightly rising (0 to 45 degrees). Inverse head & shoulders: flat or slightly falling. A steep neckline the wrong way weakens the setup. Read the guide
What does a cup & handle look like? A smooth U-shaped base (the cup), a small pullback near the old high (the handle), then a breakout above the handle's resistance, ideally on rising volume. Read the guide
Which cup & handle should you skip? One with an upsloping handle. It often means weak consolidation and fake breakouts. Flat resistance is ideal; a gentle downslope is fine. Read the guide
Cup & handle: target and stop? Target: the cup's depth, projected up from the breakout. Stop: just below the handle's low. Read the guide
Falling wedge: bullish or bearish? Usually bullish. Both lines slope down and converge, each drop gets shallower, and sellers run out of steam before a break higher. Read the guide
Rising wedge: bullish or bearish? Usually bearish. Both lines slope up, each push higher is weaker, and a confirmed break below support signals a reversal. Read the guide
When do you enter a wedge trade? Only after a decisive, confirmed breakout. Exit if price falls back inside the wedge. Entering before confirmation is guessing. Read the guide
What is a parallel channel? Price moving between two parallel lines, support below and resistance above, trending up, down or sideways. While price stays inside, the trend is intact. Read the guide
What's the real edge of trading a channel? Defined risk. At channel support your stop sits just below it; at resistance, just above. You're either right or wrong quickly. Read the guide
Which timeframe gives the strongest pattern signal? The longer one. A monthly pattern beats a weekly one, which beats a daily one. Read the guide