Chart Patterns Explained: Flags, Triangles, Double Tops

Before you read: Market Structure Explained: Swings, BOS and CHoCH

What you will learn

• How to describe common chart patterns as sequences of swings: flags, triangles, double tops and bottoms, head and shoulders, and channels.
• What a breakout and a false break are, in descriptive terms.
• Why pattern recognition is subjective, and what that means for any claim about patterns.

What is a chart pattern?

When you see a shape in a chart, are you finding something or drawing something?

A chart pattern is a named arrangement of swing highs and swing lows over several candles. If market structure is the sentence-by-sentence reading of swings, patterns are named paragraphs: recognizable groups of swings that people have given labels to.

Like candle names, pattern names are shared vocabulary. They make it quick to say “this looks like a triangle” instead of describing every swing. They are not discoveries about how markets must behave, and their definitions are loose. This lesson describes each pattern in terms of the swings that make it up, so you can check whether it is really there.

What are flags and pennants?

What does it look like when a strong move rests?

A flag has two parts:

• the pole: a fast, fairly straight move over a few candles, and
• the flag: a smaller, shorter drift that slopes gently against the pole or moves sideways, often in a narrow channel.

A pennant is similar, but the resting part narrows into a small triangle instead of a parallel channel.

Plain description: a burst of movement followed by a period of smaller, overlapping candles. Some traders read a flag as a pause in an ongoing move. Others note that the pause can just as easily become a reversal. The shape itself does not decide which.

What are triangle patterns?

What does it mean when each swing is smaller than the last?

A triangle forms when swing highs and swing lows draw closer together over time. Three versions are commonly named:

• Symmetrical: lower highs and higher lows, converging from both sides.
• Ascending: swing highs at roughly the same level, with rising swing lows.
• Descending: swing lows at roughly the same level, with falling swing highs.

Plain description: the range of each swing is shrinking. Eventually price leaves the converging lines in one direction or the other, or the shape simply fades into a range. Drawing the lines involves choices: which swings to connect, and whether to use wicks or closes.

What are double tops and double bottoms?

If price reaches the same area twice and turns both times, what has happened, and what has not?

A double top is two swing highs at about the same level, with a pullback low between them. A double bottom is the mirror: two swing lows at about the same level with a rally high between them.

The low between the two tops (or the high between the two bottoms) is often called the neckline. Many descriptions say the pattern is only complete if price later moves through the neckline; before that, it is just two highs at a similar level. This links directly to support and resistance: a double top is a zone that was tested twice.

What is a head and shoulders pattern?

How is a head and shoulders different from a double top with an extra peak?

A head and shoulders is three swing highs in which the middle one (the head) is higher than the two on either side (the shoulders). A line drawn through the lows between them is the neckline. The inverse version is the mirror: three swing lows, the middle one lowest.

Plain description: a rise to a high, a higher high, then a lower high, which in structure terms is a sequence that stops making higher highs (market structure calls the shift a change of character). Real examples rarely look as tidy as textbook drawings. Shoulders differ in height and width, and necklines slope.

Chart patterns diagram

Illustrative diagram constructed for teaching. Not real market data.

The diagram shows small constructed sketches of a flag, a symmetrical triangle, a double top, a head and shoulders and a rising channel, each labeled with the swings that define it. It is constructed for teaching and is not real market data.

What is a price channel?

What would you need to see before calling something a channel rather than a coincidence?

A channel is a rising, falling or sideways move contained between two roughly parallel lines, one through the swing highs and one through the swing lows. A sideways channel is another word for a range.

Plain description: price has rotated between two boundaries several times. A channel with more touches is easier to spot, so more chart readers may notice it. Channels drawn on a linear scale and on a logarithmic scale can look different for long moves.

What are breakouts and false breaks?

When price crosses a line you drew, has something changed, or has price just crossed a line?

A breakout is a move beyond a pattern boundary or level. A false break (or fakeout) is a move beyond it that quickly returns inside. Since the definitions depend on where the line was drawn, on whether wicks or closes count and on how quickly “quickly” is, the same move can be called a breakout by one person and a false break by another.

What are the limits of chart patterns?

If two careful people can disagree about whether a pattern exists, what does that say about claims of how often patterns work?

• Subjectivity. Patterns are identified by eye, and different people draw them differently. Automatic pattern scanners use their own definitions, which may not match yours.
• Survivorship in examples. Textbook examples are chosen because they turned out cleanly. The many shapes that started similarly and went nowhere are rarely shown.
• No fixed outcome. Each pattern can be followed by movement in either direction, or by none. These lessons do not cite success rates; published figures depend on definitions, markets, periods and costs, and are hard to reproduce.
• Hindsight. A pattern is easiest to see after it has finished. In real time, the right side of the chart is blank.

Testing a pattern idea honestly requires precise rules written before looking at results; see plans, journaling and honest testing.

What this does not tell you about chart patterns

• Where price will go after any pattern.
• Whether a shape on your chart meets anyone else’s definition.
• How any pattern has performed in the past.

Check yourself

Reflect on these; there is no score.

1. Describe a double top only in terms of swing highs and lows. Hint: two highs at a similar level and the low between them.
2. What choices do you make when drawing a triangle’s lines, and how could they change the picture? Hint: which swings, wicks or closes.
3. Why might the same move be called a breakout by one person and a false break by another? Hint: line placement and timing.
4. Find a textbook-looking pattern on any chart. Then look for a similar shape that led nowhere. Which was easier to find? Hint: what gets remembered.
5. Does “continuation pattern” establish how often a flag continues?

Last reviewed November 9, 2026. Spotted a mistake? Report an error.