Reversal Patterns Intro

Reversal patterns indicate that a current trend is likely to end and reverse direction. (Note these patterns are only valid at the top of trends)

Some of the most common reversal patterns include:

• Head and Shoulders: A bearish pattern that is formed by a peak (left shoulder), followed by a higher peak (head), and then a lower peak (right shoulder). The pattern is complete when the price falls below the “neckline” that connects the lows of the left and right shoulders. (85% win rate once confirmed on the 4H and above)
  
  
• Double Tops and Bottoms: A bearish pattern that is formed by two consecutive peaks at roughly the same level, a bullish pattern is formed by two consecutive touches at roughly the same level with a moderate peak in between. (70% win rate once confirmed on the 4H and above)
  
  
• Trendline breaks: when the price breaks through a trendline that has been in place for an extended period of time, it can indicate that the trend is reversing.