Chart Patterns Forex: Head and Shoulders, Triangles 2026

Chart patterns are the geometric formations that price creates as it moves between support and resistance levels, transitions between trends, and consolidates before continuation moves. These patterns have been documented and studied for over a century, and while no pattern guarantees a specific outcome, understanding their formation rules, breakout criteria, and measured move targets provides a significant analytical edge.

This guide covers the most important reversal and continuation patterns in forex, providing specific identification rules, confirmation criteria, and measured move calculations for each. By mastering these patterns, you add a powerful visual analysis tool to complement your existing technical and fundamental approach.

Chart Patterns Overview

Chart patterns fall into two categories: reversal patterns that signal a change in trend direction, and continuation patterns that signal a pause before the existing trend resumes. The key to profitable pattern trading is context. A head and shoulders pattern at a major weekly resistance level after an extended uptrend is far more significant than the same pattern in the middle of a range on a 15-minute chart.

Reversal Patterns

Head and Shoulders: The classic bearish reversal pattern consists of three peaks: a left shoulder, a higher head, and a right shoulder at approximately the same level as the left. The neckline connects the troughs between the peaks. When price breaks below the neckline, the pattern is confirmed. Measured target: the distance from head to neckline, projected downward from the breakout. Reliability: 70-75% on daily chart.

Inverse Head and Shoulders: The bullish mirror image. Three troughs with the middle (head) being the deepest. Neckline break upward confirms the reversal. Measured target projected upward from breakout. Reliability: 70-75%.

Double Top: Two peaks at approximately the same level with a trough between them. Confirmed when price breaks below the trough (neckline). Indicates that resistance was tested twice and held, with buyers unable to push through. Target: height of pattern from neckline. Reliability: 65-70%.

Double Bottom: Two troughs at approximately the same level. Break above the peak between them confirms the bullish reversal. Reliability: 65-70%.

Triple Top/Bottom: Three tests of the same level before reversal. Rarer than double tops/bottoms but typically more reliable (70-75%) due to the additional confirmation of the level holding.

Continuation Patterns

Ascending Triangle: Horizontal resistance with rising support (higher lows). Price is being compressed toward the resistance level. Typically breaks upward (65% of the time) in an existing uptrend. Target: height of triangle projected from breakout.

Descending Triangle: Horizontal support with declining resistance (lower highs). Typically breaks downward (65%) in a downtrend. Target: height of triangle from breakout.

Symmetrical Triangle: Converging trendlines with both higher lows and lower highs. Can break in either direction but typically continues the prior trend (55-60%). Enter on the confirmed breakout direction.

Bull Flag: A sharp rally (flagpole) followed by a slight downward-sloping consolidation (flag). When price breaks above the flag, it typically continues for a distance equal to the flagpole. Reliability: 65-70%.

Bear Flag: Mirror of bull flag: sharp decline followed by slight upward consolidation. Break below flag continues the decline.

Wedges: Rising wedges (bearish, converging upward) and falling wedges (bullish, converging downward) are both reversal and continuation patterns depending on context. Rising wedges break downward 65% of the time; falling wedges break upward 65%.

Measured Move Targets

How to Trade Chart Patterns

Step 1: Identify. Look for patterns forming at significant levels on the daily or 4-hour chart. Partial patterns are possibilities, not actionable signals.

Step 2: Confirm. Wait for the neckline or boundary break with a decisive candle close. Avoid entering on intracandle breaks that may reverse before close.

Step 3: Enter. Enter on the break or wait for a retest of the broken level, which offers better risk-reward but may miss aggressive moves.

Step 4: Stop loss. Place stops beyond the pattern's structural level. For head and shoulders, above the right shoulder. For double tops, above the peaks. For triangles, inside the triangle at the opposite boundary.

Step 5: Target. Use the measured move as your minimum target. Consider taking partial profits at the measured move and letting the remainder run with a trailing stop.