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Chart patterns: head and shoulders, double tops and bottoms, triangles

By Saad El Soussi, UAE-authorized finfluencer · Updated 2026-11-08

Chart patterns are recognisable shapes that support and resistance make on a chart. The lesson teaches five: head and shoulders and double top (bearish reversals), double bottom (bullish reversal), ascending triangle (bullish continuation) and descending triangle (bearish continuation). Each one has a line that must break with a candle close (the neckline, or the flat side of the triangle), and the lesson's entry comes after that break, often on the retest of the broken line. Until the line breaks there is no pattern, only a possibility: on gold's 4-hour chart since June 2024, 27 of 54 double tops and bottoms we found never broke their neckline.

The five patterns at a glance

The lesson opens with a warning: there are many chart patterns, and it takes time to get used to them and to use them effectively. It gives a quick insight into five, and so does this page:

Pattern	Type	What it looks like	The line that must break	Signal
Head and shoulders	Reversal	Three peaks, the middle one (the head) the highest, a smaller shoulder on each side	The neckline: the support under the two dips between the peaks	Bullish to bearish
Double top	Reversal	Two peaks at about the same price with a dip to support between them	The support at the dip (neckline)	Bullish to bearish
Double bottom	Reversal	Two lows at about the same price with a bounce to resistance between them	The resistance at the bounce (neckline)	Bearish to bullish
Ascending triangle	Continuation	Flat resistance along the tops, rising support along the lows	The flat resistance	Uptrend continues
Descending triangle	Continuation	Flat support along the lows, falling resistance along the tops	The flat support	Downtrend continues

Every pattern is built from the tools of the previous lessons: swing highs and lows (market structure), horizontal levels and trend lines (support and resistance). If you can draw those, you can see the patterns; if you cannot, the patterns will be seen everywhere and mean nothing.

Head and shoulders

Start with the largest peak of the move: the lesson calls it the head. On each side there is a smaller peak, the shoulders. Between the peaks the price dips twice to roughly the same support, and the line through those dips is the neckline (the lesson also calls it the support line). The pattern predicts a shift from bullish to bearish, but only after the third peak, the right shoulder, is followed by a break of the neckline. The right shoulder being lower than the head is the first sign that buyers are weakening: in structure terms it is the first lower high.

The mirror image, an inverse head and shoulders (three lows, the middle one deepest), is read the same way upside down: a break above its neckline signals bearish to bullish.

Double top and double bottom

Double top: the price makes a peak, falls back to a support level, rallies to a second peak at about the same height, and then turns down for good. It identifies a reversal from bullish to bearish. The support between the two tops is the neckline; a close below it confirms the pattern.

Double bottom: exactly the opposite. A period of selling makes a low, the price bounces to a resistance level, falls once more to about the same low, and then, in the lesson's words, breaks the resistance level, closes above it and retests it as support instead of resistance; then the market shifts from bearish to bullish. That sentence is the whole method: break, close, retest.

The usual way to set a target is the measured move: the height from the tops (or bottoms) to the neckline, projected from the neckline in the direction of the break. Tops at $4,100 and $4,095 with a neckline at $4,000 have a height of about $97.50, so the target is about $3,902.50. It is a reference for where to take profit, not a promise.

Ascending and descending triangles

Ascending triangle: a bullish pattern that signals the continuation of an uptrend. Draw a horizontal line along the tops (resistance) and a rising trend line along the lows (support). Inside it the market keeps making higher lows against the same ceiling; one low may not be higher, but as long as the price stays in the box the pattern holds. It eventually breaks the resistance and the rise continues.

Descending triangle: the bearish continuation. The horizontal line is now support along the lows, and a falling trend line along the tops is the resistance: lower highs against equal lows. The lesson's example breaks out of the triangle, comes back up to retest the old support, which is now resistance, and then falls lower.

Triangles are continuation patterns, so trade them in the direction of the trend that came before. An ascending triangle inside a falling daily structure is a range, not a buy signal.

What we measured: double tops, double bottoms and head and shoulders on gold

Data: COMEX gold futures (GC=F, hourly bars via Yahoo Finance, grouped into 4-hour candles in UTC): 3,718 candles from 13 June 2024 to 3 November 2026, re-run on 4 November 2026. Yahoo's hourly series mixes futures contracts around roll dates, so a few candles show a low about $50 below the market (for example 30 July 2024); we corrected 122 wicks and 13 opening prices that sat more than four typical hourly ranges away from the candle body before counting (corrected on the evening of 4 November 2026; the first version had one double bottom fewer). Gold went from $2,332.50 to above $5,600 in late January 2026 and back to $3,947.20, so the sample has a long rise and a sharp fall. Swings are marked with six candles on each side (282 swings). Double top or bottom = two consecutive swing highs (or lows) within 0.5% of each other, the swing between them is the neckline. Head and shoulders = five alternating swings where the middle one (the head) stands out from both shoulders by at least $26 (about the median 4-hour candle range, $25.70), the shoulders are within 1% of each other, and the neckline is the sloped line through the two troughs (or peaks, for the inverse). Confirmed = a 4-hour close beyond the neckline within 30 candles (about five trading days) and before any close beyond the top, bottom or head. Target = the measured move (pattern height projected from the neckline) touched within the next 30 candles; failed = a close back beyond the top, bottom or head first; neither = 30 candles passed without either.

Pattern (4-hour)	Found	Never confirmed	Confirmed	Reached the target	Failed	Neither
Double top	26	16	10	4	5	1
Double bottom	28	11	17	12	1	4
Head and shoulders	10	3	7	2	0	5
Inverse head and shoulders	9	5	4	3	0	1
Total	73	35	38	21	6	11

Four things to take from 73 cases. First, the shape alone means little: 35 of 73 never closed beyond the neckline, so trading the second top or the right shoulder before the break is a guess. Second, direction mattered more than the pattern: in a market that rose most of the period, 12 of 17 confirmed double bottoms reached their target and only 1 failed, while only 4 of 10 confirmed double tops did and 5 failed. A bearish reversal pattern against a rising higher-timeframe trend is a pause more often than a top. Third, head and shoulders confirmed and then mostly drifted: 6 of 11 broke the neckline but reached neither the target nor the head within five days; the measured move of a head and shoulders is larger, so it takes longer. Fourth, the daily chart is stricter still: with five days on each side and 1% tolerance, two years of daily gold (4 November 2024 to 3 November 2026) gave only five double tops and bottoms, three confirmed, all three reached the target. If you see a pattern every day, your definition is too loose. Triangles were not tested: drawing them needs a trend-line fit we have not automated yet. What these patterns would have earned as trades, with stops and targets, is on the backtesting page.

A worked example

Gold, daily chart bullish for months, then on the 4-hour chart two tops at $4,100 and $4,095 with a dip to $4,000 between them. You do nothing at the second top. A 4-hour candle closes at $3,988, below the neckline: the double top is confirmed. The price bounces back to $3,998 and the 1-hour chart leaves a rejection wick under the old support, now resistance. Sell at $3,998, stop at $4,035 (above the retest high and the round number, $37), target the measured move at $3,902.50 ($95.50).

Account $5,000, risk 1% = $50: 50 ÷ (37 × 100) = 0.0135, rounded down to 0.01 lots. Loss at the stop 0.01 × 100 × 37 = $37; gain at the target 0.01 × 100 × 95.50 = $95.50, 2.6 times the risk. The wide stop is the price of waiting for the close and the retest; the support and resistance page shows why retests so often close back through the level once. Check your own numbers with the lot size calculator.

Key points from the lesson

There are many chart patterns; learning to use them takes time. Start with five.
Head and shoulders: largest peak = head, smaller peaks on each side = shoulders, the support under them = neckline. A break of the neckline after the right shoulder signals bullish to bearish.
Double top: two peaks with a dip to support between them, then a permanent bearish move. Double bottom: the opposite, confirmed by a close above the resistance and a retest of it as support.
Ascending triangle: flat resistance, rising support, bullish continuation. Descending triangle: flat support, falling resistance, bearish continuation, often with a retest of the broken support.
Our numbers on gold (4-hour, June 2024 to November 2026): 35 of 73 patterns never broke the neckline; confirmed double bottoms reached the target 12 times out of 17, confirmed double tops only 4 out of 10. Wait for the close, and trade with the bigger trend.

Previous summary: technical analysis for beginners (the essential tools). Next in Module 2: support and resistance, Fibonacci retracement and candlestick patterns, the trigger at the neckline. All summaries are on Learn.

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Questions people ask

What are the most common chart patterns?

Head and shoulders, double top, double bottom, ascending triangle and descending triangle: the five the lesson teaches first. The first three are reversal patterns, the triangles are continuation patterns.

Is head and shoulders bullish or bearish?

A normal head and shoulders, at the top of a rise, is bearish: a break of the neckline after the right shoulder signals a shift from bullish to bearish. An inverse head and shoulders, at the bottom of a fall, is bullish.

When is a double top confirmed?

When a candle closes below the support between the two tops (the neckline). Before that it is only two peaks. On gold's 4-hour chart from June 2024 to November 2026, 16 of 26 double tops never closed below the neckline within five days.

How do you calculate the target of a chart pattern?

Measure the height from the tops (or bottoms) to the neckline and project it from the neckline in the direction of the break. Tops at $4,100 and $4,095 with a neckline at $4,000 give a height of about $97.50 and a target near $3,902.50.

Is an ascending triangle always bullish?

It is a continuation pattern, so it is bullish in an uptrend. It is confirmed only when a candle closes above the flat resistance; inside a falling market the same shape is just a range.

Is this the full lesson?

No. It is a written summary with the key points and our own measurements added. The course has 87 video lessons in three modules; the bot can tell you about it.

Authorized in the UAESaad Nizar El Soussi, founder of SesTrading, is listed by the UAE Capital Market Authority as an authorized finfluencer (entry 193, added 24 September 2026). Check the official list.