Chart Patterns

Cup and Handle Pattern

The cup and handle pattern is a bullish continuation formation. This pattern is one of the newer chart formations and can be easily spotted on a price chart. The formation was first popularized by William O'Neil in his 1988 book, How to Make Money in Stocks.

Bull Trap Definition

A bull trap occurs when longs take on a position when a stock is breaking out, only to have the stock reverse and shoot lower. This counter move produces a trap and often leads to sharp sell offs.

Swing High Definition

A Swing High is a peak in price movement for an asset. A swing high can occur on any trading time frame. Swing highs are based on the number of data points in a series.

Broadening Top Definition

A Broadening Top is powerful chart reversal pattern. It is comprised of three peaks at successively higher levels and, between them, two bottoms with the second bottom lower than the first.

Bear Trap Definition

A bear trap occurs when shorts take on a position when a stock is breaking down, only to have the stock reverse and shoot higher.  This counter move produces a trap and often leads to sharp rallies.

Symmetrical Triangle Definition

A symmetrical triangle is the most common triangle chart pattern. It is comprised of price fluctuations where each swing high or swing low is smaller than its predecessor. This coiling price movement creates a structure of a symmetrical triangle.

Triple Bottom Chart Pattern

Triple Bottom is a chart pattern with three bottoms very close in price. This pattern can be seen in all time-frames. There are a few requirements to classify a chart pattern as a triple bottom:

What is a Triple Top Formation?

Triple Top is a chart pattern with three tops very close in price. This pattern can be seen in all time-frames. There are a few requirements to classify a chart pattern as a triple top:

1. Price highs are close to each other

2. Equal distance in time between highs

3. Volume decreases on each successive top

Definition of an Ascending Triangle

An ascending triangle is a bullish chart formation. They can take place in both bull and bear markets, but often times they are a continuation pattern of an existing uptrend.

Definition of Wedge Chart Formation

A wedge chart formation is created when price fluctuations converge to a point on a straight line. There are two types of wedge formations: rising and falling. The wedge chart formation is not a trend reversal pattern, but only a temporary pause in the current trend.