Seven visual formations from your Day 2 PDF, with the trend, neckline, and breakout area explained in plain English.
Day 2 · Bullish patternsDouble bottom · original schematic
A chart pattern has more meaning when you know what price was doing before it formed. The diagrams below show ideas, not historical prices.
Price tends to make higher highs and higher lows. A pause may become a continuation pattern.
Price tends to make lower highs and lower lows. A base may develop into a reversal pattern.
Price moves between approximate support and resistance until the range resolves.
Trace the price path, find the level being tested, and look for follow-through. Support and resistance are areas rather than exact prices.
Two lows form near the same support area. The intervening high marks the neckline.
Watch for a sustained move above the neckline. The depth from support to neckline gives an illustrative measured move; a return below support weakens the setup.
Three troughs form around a common support zone with rallies between them.
The resistance formed by the intervening highs is the neckline. A breakout may signal a change in trend; the neckline-to-low distance is a rough projection, not a price promise.
A deeper middle low (head) sits between two shallower lows (shoulders) after a decline.
Connect the reaction highs to form the neckline. A break above it is the confirmation area; the head-to-neckline depth illustrates the measured move. Retests and failed breaks can occur.
Repeated highs press against a roughly flat resistance level while successive lows rise.
A move through resistance can resolve the compression upward. The initial triangle height is sometimes projected from breakout, but price may also break down or stall.
A sharp upward move forms a pole, then price pauses inside a short downward-sloping channel.
A break above the flag channel suggests the prior trend may resume. The pole can be used as a visual measurement; a break below the channel challenges the continuation idea.
A decline gradually flattens into a broad base before price begins to climb again.
The prior high area can serve as a neckline. A breakout may support a trend change; the base depth is only an illustrative distance. Formation takes time and may be uneven.
A rounded recovery returns to a prior high, followed by a smaller pullback called the handle.
Traders commonly watch the rim or handle resistance for a breakout. The cup depth offers a possible measured move, while a deep handle or failure under resistance reduces confidence.
Is the formation appearing after a fall or during an existing rise?
Mark approximate support, resistance, neckline, or flag boundary.
Observe whether price holds beyond the level or slips back through it.
Plan what would invalidate the idea. Projected distances are illustrative, never guaranteed.
Revisit candlestick anatomy and individual candle patterns.
This original web lesson follows the topics in the Day 2 PDF supplied for this lesson. The PDF credits Vidya Phad. The language and diagrams on this page were created for AlphaEdge Pro Academy.
Chart patterns describe possible market behaviour. Breakouts can fail and measured moves do not predict or guarantee returns. This page is for education, not a trading recommendation.