Chart patterns
Chart patterns: what the shape actually tells you
A chart pattern is a description of how a sequence of price swings is arranged. A useful pattern reading identifies the relevant turns, states what is still incomplete, and explains its limits. A pattern name by itself does not establish the next move.
Start with the swings behind the name
Ask which highs and lows form the proposed structure. If you hide the label, can you still identify its boundaries? This is a practical way to distinguish a checkable description from a story suggested by the overall appearance of a screenshot.
Two readers can disagree because they select different swings, different time windows, or different tolerances for a “similar” high. A repeatable detector makes those choices explicit. Repeatability makes a result easier to inspect; it does not make the result a forecast.
Four common families of shapes
- Tops and bottoms: repeated visits to an upper or lower area. Check the intervening turns, rather than counting nearby candles as separate tests.
- Triangles: swing boundaries that converge. The arrangement of the two boundaries distinguishes ascending, descending, and symmetrical versions.
- Wedges: converging boundaries that slope in the same general direction. The boundaries matter more than a label attached to a cropped picture.
- Channels: upper and lower swing boundaries that remain roughly parallel over the measured segment.
These descriptions help organize observations. A chart can match more than one description at different scales, or fail to match any closely enough. “No clear pattern” is a useful result when the evidence is weak.
What ChartPro measures
ChartPro’s pattern engine works on the sequence of swing points computed from price bars. It tests geometric conditions for structures including triangles, wedges, channels, flags, double tops and bottoms, and head-and-shoulders variants. It reports matches that meet its method’s thresholds.
Because swing detection needs neighboring bars, a newly forming turn may not yet qualify as a confirmed swing. This is one reason a shape that looks obvious near the right edge can be absent from an algorithm’s output.
A completion percentage is not a success rate
In ChartPro, pattern completion describes progress through the detector’s structural rules. It is not the probability of a price move, a forecast confidence, or a measured historical win rate.
A percentage cannot be interpreted without knowing what its denominator means. Before relying on any tool’s score, ask whether it measures geometric fit, structural completion, model confidence, or a separately tested outcome. Those are different quantities.
What would make a pattern reading misleading?
- Presenting an unfinished structure as complete.
- Hiding the timeframe or selecting a crop that changes the apparent shape.
- Calling a fit or completion score an outcome probability.
- Omitting that different lookback windows can produce different matches.
- Turning a descriptive label into an instruction without any additional basis.
Use the label as a starting point for inspection
Open the chart, locate the relevant swings, and compare the boundaries with the displayed history. Check the nearby price levels separately. Keep “what the bars show,” “what the method calls it,” and “what remains uncertain” as three distinct notes. That makes the reading useful even when the next bar changes the picture.