Chart Patterns: Triangles, Flags, Head & Shoulders, Double Tops
How to recognize triangles, flags, head and shoulders and double tops, what confirms them, how measured-move targets work, and how to trade them with pending orders.
Step back from individual candles and price often traces recognizable shapes: a series of rising lows pressing against a flat ceiling, a sharp rally followed by a tidy pause, three peaks with the middle one highest. These chart patterns reflect the same tug-of-war between buyers and sellers as single candles, but over dozens of candles and several swings.
This lesson covers the patterns traders watch most: triangles, flags and pennants, head and shoulders, and double tops and bottoms. You will see how each forms, what confirms it, how the classic measured-move target is calculated, and how to turn a pattern into orders on Traders Portal. Patterns describe probabilities, not certainties, and many fail.
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Continuation and reversal patterns
Continuation patterns form when a trending market pauses to consolidate before, often, resuming in the same direction. Reversal patterns form at the end of a move and show the trend losing control. Neither label is a rule: a continuation pattern can break the "wrong" way, and when it does, that is information too.
Patterns are built from swing highs, swing lows and trendlines, so the ideas in Trendlines, Channels and Market Structure are the foundation for everything below.
Triangles
A triangle forms when price swings in a narrowing range.
- Ascending triangle: a flat ceiling with rising lows. Buyers keep stepping in higher while sellers defend one level.
- Descending triangle: a flat floor with falling highs, the mirror image.
- Symmetrical triangle: falling highs and rising lows converging, showing contracting volatility with no clear side in control.
Flags and pennants
A flag starts with a sharp, almost vertical move called the pole, followed by a small channel sloping gently against it. A pennant is the same idea with a tiny symmetrical triangle instead of a channel. Both show a market catching its breath after a strong move. The measured move adds the pole's length to the breakout point.
Flags that last too long, or that retrace most of the pole, lose their meaning; the original momentum has faded.
Head and shoulders
A head and shoulders is a reversal pattern at the top of an uptrend: a peak (left shoulder), a higher peak (head), then a lower peak (right shoulder). The lows between them form the neckline. The pattern is confirmed when price closes below the neckline. The inverse head and shoulders is the same shape upside down at the bottom of a downtrend.
Double tops and double bottoms
A double top is two peaks at roughly the same price with a trough between them. It is confirmed when price closes below that trough. A double bottom is the mirror image and is confirmed by a close above the peak between the two lows.
| Pattern | Usual type | Confirmed by | Measured move |
|---|---|---|---|
| Ascending / descending triangle | Continuation | Close beyond the flat edge | Widest height from breakout |
| Symmetrical triangle | Either way | Close beyond either edge | Widest height from breakout |
| Flag / pennant | Continuation | Close beyond the flag | Pole length from breakout |
| Head and shoulders | Reversal | Close beyond the neckline | Head to neckline, from neckline |
| Double top / bottom | Reversal | Close beyond the middle swing | Pattern height from the break |
Confirmation, false breakouts and retests
Most pattern traders wait for a candle close beyond the boundary rather than a brief poke through it. Extra evidence includes rising volume on the breakout, and a retest, where price comes back to the broken level and holds it from the other side.
Even so, false breakouts are common: price clears the level, triggers breakout orders, then reverses back inside the pattern. Breakout vs Mean Reversion Strategies explains why some traders specifically trade those failures.
Trading a pattern on Traders Portal
The trade chart does not currently have drawing tools. You can mark trendlines and pattern boundaries in a separate charting tool, or simply note the key prices, then use the platform's orders and alerts at those prices.
- Note the levels
Write down the breakout level, the price that would prove the pattern wrong, and the measured-move target.
- Set a price alert
Use the bell on the market's row, or Account → Alerts, to be notified when price reaches the breakout level, so you do not have to watch the chart.
- Place a pending order
On the Limit / Stop tab, a buy price above the Ask becomes a Buy Stop and a sell price below the Bid becomes a Sell Stop. Turn on TP / SL and enter your stop and target before you confirm.
- Manage or cancel
The order appears under Pending Orders, where you can cancel it if the pattern breaks the other way. On desktop you can also drag a pending order's line on the chart to a new price.
Conclusion
Chart patterns are larger versions of the story candles tell: triangles and flags show a trend pausing, head and shoulders and double tops show one possibly ending. Each has a clear confirmation, usually a close beyond a boundary, and a measured-move target that works as a rough guide. False breakouts are a normal part of trading them, so decide where you are wrong before you enter, size from that distance, and use pending orders and alerts to act on your plan rather than on impulse.
Related reading
FAQs
- What is the difference between a chart pattern and a candlestick pattern?
- A candlestick pattern is one to three candles. A chart pattern is a larger shape built from many candles and several swings, such as a triangle or a head and shoulders, and usually takes days or weeks to form on a daily chart.
- How accurate are measured-move targets?
- They are rough guides, not destinations. Price often stops short of the target, at a nearby support or resistance level, and sometimes goes further. Many traders take profit at the nearest obvious level rather than waiting for the full projection.
- What is a false breakout?
- A false breakout is when price moves beyond a pattern's boundary and then quickly returns inside it. Waiting for a candle to close beyond the level, or for a retest, filters some of them out, but not all.
- Can I draw trendlines on the trade chart?
- The trade chart does not currently have drawing tools. You can mark patterns in a separate charting tool, note the key prices, and then place pending orders and alerts at those prices on the platform.
- Do pending orders tie up margin before they fill?
- Yes. On this platform, a pending order reserves margin as soon as you place it, so it reduces your free margin even before price reaches it. Cancel orders you no longer want from the Pending Orders tab.