Reversal Chart Patterns (Beginner’s Guide)

Learn key reversal patterns like Double Top, Double Bottom, Head & Shoulders, and more to spot market trend changes and trade smarter.

A practical guide to the most reliable reversal patterns: Double/Triple Tops & Bottoms, Head & Shoulders / Inverse H&S, and the Inverted Cup & Handle. Learn structure, psychology, entries, stops, and targets—without the fluff.

Table of Contents

1. What Are Reversal Patterns?
2. Double Top
3. Double Bottom
4. Triple Top
5. Triple Bottom
6. Head & Shoulders
7. Inverse Head & Shoulders
8. Inverted Cup & Handle
9. Quick Comparison
10. FAQs
11. What’s Next

📌 What Are Reversal Patterns?

Reversal patterns signal that a prevailing trend is losing strength and may soon reverse direction. They usually appear after prolonged uptrends or downtrends and complete once price breaks a key support or resistance level.

✅ Rule of thumb: Wait for confirmation (a clean breakout and preferably volume). Until then, treat it as a setup, not a signal.

🔴 Double Top

A bearish reversal pattern seen after an uptrend. Price makes two peaks at roughly the same level, showing resistance is holding.

• Neckline: support between the two peaks
• Entry: breakdown below neckline
• Stop-loss: above second peak
• Target: height from peak to neckline projected down

🟢 Double Bottom

A bullish reversal pattern after a downtrend. Price forms two troughs at a similar level, indicating strong support.

• Neckline: resistance between the two lows
• Entry: breakout above neckline
• Stop-loss: below second trough
• Target: depth of pattern projected upward

🔴 Triple Top

Similar to double top but with three failed attempts to break resistance. Very strong bearish reversal signal.

• Entry: breakdown below neckline
• Stop-loss: above last peak
• Target: height from top to neckline

🟢 Triple Bottom

Three failed attempts to break support after a downtrend. Bullish reversal pattern.

• Entry: breakout above neckline
• Stop-loss: below last trough
• Target: depth from neckline to bottom

🔴 Head & Shoulders

The most famous bearish reversal pattern. Formed by:

1. Left shoulder (peak)
2. Head (higher peak)
3. Right shoulder (lower peak)

The neckline connects the two troughs. Break below = bearish reversal.

🟢 Inverse Head & Shoulders

Bullish reversal pattern in a downtrend. Structure:

1. Left shoulder (low)
2. Head (deeper low)
3. Right shoulder (higher low)

Breakout above neckline confirms bullish reversal.

🔴 Inverted Cup & Handle

A bearish reversal pattern where price forms a rounded top (inverted cup) followed by a small upward retracement (handle). Breakdown from the handle = continuation lower.

• Seen often after extended uptrends
• Target: depth of cup projected downward

📊 Quick Comparison

Pattern	Type	Signal
Double Top	Bearish	Uptrend reversal
Double Bottom	Bullish	Downtrend reversal
Triple Top	Bearish	Stronger uptrend reversal
Triple Bottom	Bullish	Stronger downtrend reversal
Head & Shoulders	Bearish	Major uptrend reversal
Inverse H&S	Bullish	Major downtrend reversal
Inverted Cup & Handle	Bearish	Trend exhaustion & reversal

❓ FAQs

Which reversal pattern is most reliable?

Head & Shoulders and Double Top/Bottom are considered highly reliable when confirmed with volume.

Can reversal patterns fail?

Yes. A failed pattern often triggers a strong move in the opposite direction. That’s why stop-loss is critical.

📈 What’s Next?

Next in the series: Continuation Patterns (Flags, Pennants, Triangles, Wedges).
Continue here ➜ Read the next guide

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