Chart patterns are geometric shapes that price forms time and again and that, when they resolve, tend to be accompanied by directional moves. Recognizing them early is one of the advantages of classic technical analysis that is best automated.
Before you start: how to confirm any pattern
All the patterns in this guide are confirmed the same way: the breakout of their defining line with momentum and, if possible, volume. Until the pattern breaks, it is only a hypothesis. The other key principle: on the breakout, direction usually flips relative to the formation (price spent its accumulated pressure during the compression).
The seven patterns in a table
| Pattern | Shape | Signal on breakout |
|---|---|---|
| Triangle | Two converging lines (symmetrical, ascending, descending) | Continuation or reversal depending on the type |
| Wedge | Two converging lines with the same slope | Breakout against the slope |
| Channel | Two parallel lines with a slope | Trend continuation |
| Double top/bottom | Two peaks or valleys at the same level | Reversal after the repeated level |
| Head and shoulders | Three peaks: central one higher | Reversal on the neckline breakout |
| Range | Consolidation rectangle | Breakout in either direction |
Triangles: the compression before the move
Price makes highs and lows that get closer and closer between converging lines. The three types:
- Symmetrical: no dominant direction; it tends to be a continuation, and the breakout sets the new direction.
- Ascending: resistance is flat and support rises → bullish bias.
- Descending: support is flat and resistance falls → bearish bias.
The projected target usually equals the height of the triangle applied from the breakout point, measured from the broken line.
Wedges and channels
Wedges: when the two lines go in the same direction, with a steep slope and converging. Their breakout tends to surprise and runs against the slope, just like in a triangle but with more prior trend.
Channels: parallel lines at a slope. They are continuation structures: while price respects the band, you trade within it; breaking out of the channel (against its slope) warns of exhaustion.
Double top, double bottom and head and shoulders
Double tops and bottoms are born from a repeated level: price tests the same high (or low) twice without being able to continue, leaving the "M" or the "W." When the intermediate level (called the neckline) breaks, the pattern is confirmed.
The head and shoulders is its three-peak version: two symmetrical shoulders and a higher central head (in a top), with the neckline joining the two valleys. The neckline breakout with momentum is one of the most classic confirmations in technical analysis, and the projection usually measures the neckline-to-head distance.
Consolidation ranges
When price compresses its amplitude over time inside a rectangle, it accumulates energy. The range breakout —with momentum and, preferably, volume— usually triggers significant directional moves. Ranges are the prelude to the big intraday thrusts, especially at session opens.
How to detect them automatically in TradingView
Automatic detection looks for the pivots that form each figure and validates its geometric conditions:
- Triangles, wedges and channels: slopes, convergence and parallelism of the lines.
- Doubles and head and shoulders: head excess over the shoulders and level tolerance.
- Ranges: amplitude compression over N bars.
The Todo lo posible indicator detects all seven families automatically, draws the pattern with its trendline or neckline and a label with its name, and includes 29 precision settings (pivots, lookback window, tolerance, minimum slope, head excess and peak separation).
Seven automatic chart pattern families, divergences, sessions, S/R, liquidity and 33 alerts in a single indicator. €10, one-time payment.
Frequently asked questions
What are the most reliable patterns?
Double top/bottom and head and shoulders have the highest recognition rate; triangles and wedges appear more frequently. Their reliability rises with nearby support or resistance and volume on the breakout.
What is the difference between a triangle and a wedge?
In a triangle the lines converge with opposite slopes on a flat structure. In a wedge, both go in the same direction and the breakout usually runs against the slope.
When is a pattern confirmed?
When price breaks its defining line (the neckline in head and shoulders, the trendline in triangles) with momentum and, if possible, volume. Until the breakout, it is only a hypothesis.
Can they be detected automatically in TradingView?
Yes. A Pine Script indicator looks for the pivots that form each figure and draws the pattern with its name and lines, with adjustable precision details.