The Most Successful Chart Pattern, Ranked

Voting rules: Choose the chart pattern you think is the most successful!

Updated on May 9, 2024 06:59

Traders and analysts often consider the success of various chart patterns to be central to their investment strategies. By compiling a ranking based on popular opinion, individuals can better gauge which patterns are deemed most reliable and beneficial. This collective insight provides a clearer picture of market trends and helps refine trading decisions. On this website, users have the unique opportunity to cast votes for the chart patterns they find most successful. These votes are then used to dynamically generate a live ranking that reflects the current consensus among participants. Engaging with this process not only contributes to a shared pool of knowledge but also helps individuals discover which patterns might be worth closer scrutiny.

What Is the Most Successful Chart Pattern?

1

51
votes
Bullish and Bearish Flags
The Bullish and Bearish Flags are chart patterns that signal a continuation of an existing trend. The patterns resemble a flagpole with a flag, hence the name. A Bullish Flag indicates a temporary pause in a bullish trend, while a Bearish Flag represents a brief consolidation in a bearish trend.

Pattern Type: Continuation

Flagpole: Vertical price movement forming the initial trend

Flag: Sideways price movement forming a rectangular shape

Duration: Typically a few weeks to a few months

Breakout: Confirmed when price breaks above the upper trendline of the flag (Bullish Flag) or below the lower trendline (Bearish Flag)
2

43
votes
Head and Shoulders
The Head and Shoulders chart pattern is a reversal pattern that forms after an uptrend. It is characterized by three distinct peaks, with the middle peak (the head) being higher than the other two peaks (the shoulders). The pattern indicates a potential trend reversal from bullish to bearish.

Pattern Type: Reversal

Trend: Uptrend

Number of Peaks: 3

Peaks' Characteristics: Head is higher than shoulders

Neckline: Support level connecting the lows between the shoulders
3

17
votes
Cup and Handle

William J. O'Neil
The Cup and Handle is a bullish continuation pattern commonly found in technical analysis of stock market charts. It is formed when a stock price undergoes a U-shaped consolidation followed by a small gap up, creating a pattern that resembles a cup with a handle. It signifies a period of consolidation and subsequent breakout, indicating a potential bullish trend continuation.

Pattern Formation: U-shaped consolidation followed by a small gap up

Pattern Duration: Several weeks to several months

Volume: A decrease in volume during the consolidation period and an increase in volume during the breakout

Cup Depth: The depth of the cup should typically be between 15 to 30% from the peak to the bottom of the cup

Handle Depth: The handle should typically be less than 15% from the peak of the cup
4

10
votes
Double Bottom and Double Top
The Double Bottom and Double Top is a chart pattern commonly found in technical analysis that signals a potential trend reversal. It consists of two consecutive troughs or peaks, with a small price retracement in between.

Pattern Type: Reversal pattern

Formation: Two consecutive troughs (Double Bottom) or peaks (Double Top)

Price Retracement: Small retracement between the two bottoms or tops

Significance: Considered a strong reversal signal when found after a prolonged downtrend (Double Bottom) or uptrend (Double Top)

Support and Resistance: The bottoms or tops serve as support and resistance levels
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11
votes
Ascending and Descending Triangles
The Ascending and Descending Triangles are chart patterns used in technical analysis to identify potential price continuation or reversal trends in financial markets. The Ascending Triangle pattern is formed by a horizontal resistance line and a rising trendline that converges to create a triangle shape. The Descending Triangle pattern, on the other hand, is formed by a horizontal support line and a descending trendline. Both patterns indicate a period of consolidation before a potential breakout.

Structure: Consists of a horizontal line connecting swing highs or lows with a diagonal trendline forming a triangle shape.

Duration: Can range from a few weeks to several months.

Breakout Direction: Ascending Triangle typically breaks out to the upside, while Descending Triangle tends to break out to the downside, though reversals can occur.

Volume: Volume tends to decrease throughout the triangle formation and often expands during the breakout.

Price Target: Measured by the vertical distance between the initial breakout point and the widest part of the triangle applied from the breakout point.
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9
votes
Bullish and Bearish Rectangles
The Bullish and Bearish Rectangles are reliable chart patterns commonly used in technical analysis to identify potential trend continuation or reversal. These patterns are formed when price movement trades within a rectangular-shaped range, creating a consolidation phase before a breakout occurs in the direction of the previous trend.

Type: Chart pattern

Pattern Type: Continuation

Pattern Direction: Bullish or Bearish

Formation: Rectangle

Duration: Variable, typically weeks to months
7

11
votes
Bullish and Bearish Wedges
The Bullish and Bearish Wedges are chart patterns used in technical analysis to predict future price movements. They are characterized by converging trendlines that create a narrowing wedge shape.

Description: Bullish Wedge: A wedge pattern where both trendlines slope upwards. Bearish Wedge: A wedge pattern where both trendlines slope downwards.

Significance: Bullish Wedge: Usually considered a bullish continuation pattern that suggests an upward trend will resume. Bearish Wedge: Typically seen as a bearish continuation pattern that signals a downward trend will resume.

Validation: Bullish Wedge: Confirmation of the pattern occurs when the price breaks out above the upper trendline. Bearish Wedge: Confirmation happens when the price breaks out below the lower trendline.

Volume: Bullish Wedge: Volume tends to decrease as the pattern forms and increases when the breakout occurs. Bearish Wedge: Volume tends to decrease as the pattern forms and increases during the breakout.

Duration: Both patterns can last anywhere from a few weeks to several months.
8

8
votes
Symmetrical Triangles
The Symmetrical Triangle is a popular chart pattern that indicates a period of consolidation in the market before a potential breakout. It is formed by connecting the series of lower highs and higher lows with two converging trend lines, creating a triangle shape that appears symmetrical.

Shape: Triangle

Pattern Type: Continuation

Trend: Neutral

Duration: Variable

Symmetry: Equal distance between trend lines
9

8
votes
Pennants
Pennants are a type of continuation chart pattern that resembles a small symmetrical triangle. They are typically formed after a sharp price movement, followed by a brief consolidation, representing a temporary pause before the continuation of the previous trend. Pennants are considered reliable patterns that indicate a high probability of the price resuming its previous direction.

Shape: Pennants are triangular in shape, resembling a small symmetrical triangle.

Duration: The pattern usually forms over a relatively short time frame, typically ranging from a few days to a few weeks.

Volume: Volume tends to decrease during the formation of the pattern, indicating a decrease in market participation.

Slope: The sloping trendlines that form the pennant pattern are generally converging and have a similar angle.

Flagpole: Pennants are typically preceded by a strong price move, known as the flagpole, which forms the initial flagpole pole of the pattern.
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9
votes
Gaps
Gaps is a chart pattern used in technical analysis to identify significant price movements between successive trading periods. It is characterized by a gap in the price chart, where the opening price of one trading period is significantly different from the closing price of the previous period. Gaps can occur in both upward and downward directions, indicating a shift in market sentiment.

Type: Chart Pattern

Purpose: Identify significant price movements

Nature: Based on market sentiment and price gaps

Direction: Can occur in both upward and downward directions

Significance: Indicates potential support or resistance levels

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Discussion

Ranking factors for successful chart pattern

Accuracy

The pattern should accurately predict price movements in the intended direction.
Frequency

The pattern should occur frequently enough to be reliable and actionable.
Size

The pattern should have a significant size and amplitude to be considered significant.
Context

The pattern should occur within a relevant market context, such as a trend or range.
Timeframe

The pattern should appear across multiple timeframes to be considered more reliable.
Confirmation

The pattern should be confirmed by other technical indicators or price action signals to strengthen its validity.
Risk-to-Reward ratio

The pattern should offer a favorable risk-to-reward ratio to justify a trade.

About this ranking

This is a community-based ranking of the most successful chart pattern. We do our best to provide fair voting, but it is not intended to be exhaustive. So if you notice something or pattern is missing, feel free to help improve the ranking!

Statistics

1516 views
176 votes
10 ranked items

Voting Rules

A participant may cast an up or down vote for each pattern once every 24 hours. The rank of each pattern is then calculated from the weighted sum of all up and down votes.

More information on most successful chart pattern

When it comes to trading, chart patterns are an essential tool for technical analysis. They help traders identify potential entry and exit points in the market by analyzing the price movement and trends of a particular security or currency. Among the many chart patterns that exist, a few have proven to be particularly successful over time. These patterns include the double top, double bottom, head and shoulders, and ascending and descending triangles. Each pattern has its unique characteristics and can be used in different trading scenarios. Understanding these patterns and how to identify them can give traders a significant advantage in the market. However, it is important to note that chart patterns should not be the sole basis for trading decisions and should always be used in conjunction with other analysis tools and strategies.