The whole library
24 articles
Clear filtersReading a Candlestick
Each candle compresses a period of trading into four prices. Learning to read the body and the wicks is the single highest-return skill in chart reading.
Support, Resistance and Breakouts
Prices where buying or selling has repeatedly been heavy enough to stall a move. The mechanism is order flow and memory, not magic numbers.
Trendlines and Channels
A straight line through successive highs or lows, describing the slope of a move. Useful, and more subjective than almost anything else on a chart.
The Bull Flag
A sharp advance followed by a shallow, orderly pullback. It is the most common continuation shape and its defining quality is what the pullback does not do.
The Flat Base
A tight sideways range that holds after an advance rather than giving it back. Its virtue is that it is boring, which is exactly what makes it informative.
The Cup and Handle
A rounded recovery back to a prior high, followed by a small drift before the level is tested. The shape describes a supply problem being worked through.
The Ascending Triangle
A flat ceiling met by a rising series of lows. Buyers are paying up earlier each time while a fixed supply sits overhead, and the shape has to resolve.
Volatility Contraction
A sequence of successively shallower pullbacks, each on lighter volume. It is less a shape than a process, and the process is supply being absorbed.
Double Bottoms and Double Tops
Two extremes at a similar price separated by a move against them. The second test is where the information is, and its character is what distinguishes the pattern from a continuation.
Head and Shoulders
Three peaks with a higher middle one, measured against the line joining the troughs. The most recognisable reversal shape and the most over-identified.
Gaps
A bar that opens away from the prior close, leaving a space where nothing traded. The cause matters more than the shape, and most of them have a cause on record.
Reversal Candles: Hammer, Engulfing, Doji and Shooting Star
Named single- and two-bar shapes that describe a session's balance between buyers and sellers. They describe a condition; the word reversal in their names promises more than they deliver.
Volume Confirmation
The idea that a price move backed by heavy participation carries more information than the same move on light volume. It is the most durable principle in pattern work.
Failed Patterns, and What They Tell You
Most patterns fail. That is the base rate rather than a defect, and a failure carries real information because of who it traps.
Rising and Falling Wedges
Two converging lines that both slope the same way. The convergence is the observation; the direction attached to it in the folklore is a separate claim.
Pennants and Rectangles
Two continuation shapes that differ only in whether the pause is converging or flat. Both describe a period in which nothing was decided.
Descending and Symmetrical Triangles
The other two triangles. All three describe a narrowing range, and the labels differ only in which boundary is flat.
Rounding Bottoms and Tops
A gradual curve rather than a sharp reversal. It describes a slow change in the balance between buyers and sellers, and it takes a long time to become visible.
Island Reversals
A cluster of bars separated from everything around it by gaps on both sides. Rare, unambiguous to identify, and about the population of holders trapped inside it.
Morning and Evening Stars
A three-bar sequence: a strong bar, a small indecisive one, and a strong bar the other way. The middle bar is where the description lives.
Harami and Engulfing Patterns
Two two-bar relationships that are mirror images: one bar contained inside the previous one, or one bar covering it entirely.
Piercing Lines and Dark Cloud Covers
Two-bar patterns defined by how far the second session recovers into the first. The threshold is a convention, and the degree is the information.
Three White Soldiers and Three Black Crows
Three consecutive strong sessions in the same direction. The pattern is a description of persistence, and persistence is exactly what momentum research measures.
Measured Moves and Targets
Every named pattern comes with a convention for projecting a target. All of them do the same thing: scale the expected move to the size of the structure.