7. Classical Chart Patterns: Double Bottoms, Head & Shoulders & Triangles
Part of Chapter 05: Technical Analysis Foundations & Candlestick Anatomy
- Reversal patterns: Double Top/Bottom, Head & Shoulders, Inverted H&S
- Continuation patterns: Bull/Bear Flags, Ascending/Descending Triangles
- Measured move price target calculations based on pattern height
Classical chart patterns represent recurring visual representations of trader psychology across consolidation ranges.
A Head and Shoulders top features a left shoulder, a higher peak (head), and a lower peak (right shoulder), separated by a neckline. The failure of the right shoulder to exceed the head demonstrates exhaustion among buyers, and breaking the neckline triggers a technical selloff.
Measured moves allow you to calculate logical take-profit targets: measure the vertical distance from the neckline to the peak of the head, and project that exact distance downward from the breakout point.
Always wait for a candle body close outside the neckline. Over 40% of apparent Head and Shoulders patterns in crypto fail and trap early short sellers into violent short squeezes.
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All Lessons in Chapter 05
Technical Analysis Foundations & Candlestick Anatomy (10 Lessons)