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Chart pattern cheat sheet: 8 patterns, their rules and measured odds
One page to compare the patterns traders watch. For each: what it is, the first rule we require, and how often it moved the expected way 10 trading days later in 2,312 stocks since 2015.
| Pattern | What it is | Key rule | Measured odds |
|---|---|---|---|
| Bull and bear flags | A flag is a short, tidy pause after a sharp move. | A real pole: a move of at least 12% in 3 to 8 days, built from several candles going the same way, not one big gap day. | Bull flag: 51% as expected (400 ex.) Bear flag: 42% as expected (122 ex.) |
| Trading range / horizontal channel | A trading range, also called a horizontal channel or tunnel, is a stretch where a stock bounces between a floor and a ceiling instead of trending. | A real band: the range is about 5% to 12% wide. Narrower is just noise, wider is a swing, not a channel. | Trading range (tunnel): 52% up (1,123 ex.) |
| Accumulation (volume) | Accumulation is a volume story. | Quiet price: the stock moves 12% or less across the window, so there is no obvious trend. | Accumulation (volume favours buyers): 50% as expected (2,346 ex.) Accumulation (volume favours sellers): 46% as expected (1,222 ex.) |
| Volatility contraction (VCP) | In a volatility contraction pattern each pullback is shallower than the one before. | At least two pullbacks, and each one is at least 15% shallower than the last. | Volatility contraction: 53% up (14,736 ex.) |
| Double top and double bottom | A double top is two nearly equal highs with a dip between them, a sign the market tried a level twice and could not break through. | Matching extremes: the two highs or lows are within about 2.5% of each other. | Double bottom: 54% as expected (1,531 ex.) Double top: 50% as expected (1,681 ex.) |
| Head and shoulders (and inverse) | A head and shoulders is a reversal shape with three peaks: a left shoulder, a higher head, and a right shoulder at about the same height as the left. | A prominent head: the head extends at least 4% beyond both shoulders. | Inverse head and shoulders: 56% as expected (1,772 ex.) Head and shoulders: 51% as expected (1,778 ex.) |
| Breakaway gap | A breakaway gap is a stock opening far above or below the previous close, usually on news, with unusually heavy volume. | A real gap: the open is at least 6% away from the prior close. | Gap up: 50% as expected (4,887 ex.) Gap down: 52% as expected (3,790 ex.) |
| Parabolic moves and capitulation | A parabolic move is a stock racing higher with no pause, and capitulation is the mirror image: a rush lower as holders give up. | A big, fast move: at least 30% in 30 days or less. | Capitulation (sharp drop): 56% as expected (2,874 ex.) Parabolic run-up: 51% as expected (7,747 ex.) |
A random chart ended higher 53% of the time over the same window. "As expected" means higher for bullish patterns and lower for bearish ones. Past results, not a prediction; not investment advice. See the full results and method.
How to use this sheet
- Start with the pattern's rules, not its name. If a rule fails, it is not the pattern.
- Read the odds as a tilt, not a signal. Most sit within a few points of a random chart.
- Practise before you trust your eye: play the free quiz.
Practise all 8 patterns on real charts
Free quiz here, or hundreds of charts in the app, with the real odds shown after every call.
