Intermediate Module 3 42 Chart Patterns Reversal + Continuation Wedges + Gaps + Harmonics

Module 3: Chart Patterns
Reversal & Continuation (ALL 42)

Patterns are not “drawings”. They’re behavior maps. Learn how to identify, confirm, invalidate, and manage risk — with a full library of 42 chart patterns.

Start Lesson 3.1 → ← Back to Intermediate Hub
Education only. No signals. No guaranteed profits. Trading involves risk. Use risk management before real money.

✅ Rules, not vibes

Each pattern has confirmation + invalidation.

🧠 Context first

Trend, level, session, liquidity matter.

📚 Upgrade path

Intermediate → advanced → mentorship.

LESSON 1/6 ~12–16 min

3.1 Pattern Framework (The Rules)

Lesson Objective

Learn a single framework you can apply to every pattern so you stop “guessing” and start trading patterns like a system.

The 6-Point Pattern Checklist

  • 1) Context: Trend + key level (support/resistance)
  • 2) Structure: Clear boundary lines (not messy)
  • 3) Compression: Volatility contracts before breakout
  • 4) Trigger: Break + candle close
  • 5) Entry logic: Retest / pullback plan
  • 6) Invalidation: Exact level that proves you wrong

Most common pattern mistakes

  • • Drawing patterns everywhere (no context)
  • • Entering before confirmation (early entry = pain)
  • • No invalidation (you become “hope trader”)
  • • Oversizing because the pattern “looks perfect”
  • • Ignoring news/session liquidity conditions
🧩

[Image Placeholder]

Pattern checklist diagram (Context → Trigger → Risk)

SAPP Rule (Simple but deadly)

If you cannot write the invalidation in one sentence, you are not ready to enter the trade.

Next: Reversal Patterns →
LESSON 2/6 ~18–25 min

3.2 Reversal Patterns (14)

Key idea

Reversal patterns work best at major levels after a clear trend. They usually show failure to continue + a strong break.

1) Head and Shoulders (Top)

Reversal

Structure: Left shoulder → head → right shoulder + neckline. Confirm: break & close below neckline. Invalidation: above right-shoulder swing.

2) Inverse Head and Shoulders (Bottom)

Reversal

Confirm: break & close above neckline. Best entry: neckline retest. Invalidation: below right-shoulder swing.

3) Double Top

Reversal

Two peaks near same level + break of the “valley” support. Confirm: break & close below support. Invalidation: above the highs.

4) Double Bottom

Reversal

Two lows near same level + break of the “peak” resistance. Confirm: break & close above resistance. Invalidation: below the lows.

5) Triple Top

Reversal

Three failures to break a level. Confirm: break & close below base support. Note: stronger when volume/volatility fades.

6) Triple Bottom

Reversal

Three failures to break a floor. Confirm: break & close above resistance. Invalidation: below the floor.

7) Rounding Top

Reversal

Slow shift from buyers to sellers (curved top). Confirm: break of support + acceleration down. Best with: macro/level context.

8) Rounding Bottom

Reversal

Slow shift from sellers to buyers (curved bottom). Confirm: break & close above resistance line.

9) Diamond Top

Reversal

Expansion then contraction (diamond shape) after an uptrend. Confirm: break down from the lower boundary.

10) Diamond Bottom

Reversal

Diamond shape after a downtrend. Confirm: break & close up from upper boundary.

11) Broadening Top (Megaphone Top)

Reversal

Higher highs + lower lows (widening swings) near the top. Confirm: breakdown after final high. Danger: volatility is high → risk small.

12) Broadening Bottom (Megaphone Bottom)

Reversal

Widening swings near the bottom. Confirm: breakout above last swing high.

13) Island Reversal

Reversal

Price gaps away and later gaps back, leaving an “island”. Confirm: second gap + failure to fill. Note: common on indices/stocks; still useful conceptually.

14) Bump-and-Run Reversal

Reversal

Trendline break after a sharp “bump” acceleration (blow-off). Confirm: break & close through the original trendline.

← Previous Next: Continuation Patterns →
LESSON 3/6 ~18–25 min

3.3 Continuation Patterns (14)

Key idea

Continuation patterns are “pause + continuation” structures. They work best with the trend, after a strong impulse move.

15) Bull Flag

Continuation

Impulse up → small channel down (flag) → breakout up. Confirm: break & close above flag top. Invalidation: below flag low.

16) Bear Flag

Continuation

Impulse down → small channel up → continuation down. Confirm: break & close below flag base.

17) Bull Pennant

Continuation

Impulse up → tight triangle (pennant) → breakout up. Best entry: retest after breakout.

18) Bear Pennant

Continuation

Impulse down → tight triangle → breakout down. Invalidation: above pennant top.

19) Ascending Triangle

Continuation

Flat resistance + rising lows. Confirm: break & close above resistance. Context: strong in uptrends.

20) Descending Triangle

Continuation

Flat support + falling highs. Confirm: break & close below support. Context: strong in downtrends.

21) Symmetrical Triangle

Continuation

Lower highs + higher lows (compression). Rule: trade breakout direction with confirmation (not prediction).

22) Rectangle (Range Continuation)

Continuation

Sideways consolidation. Confirm: break & close beyond the range. Best: breakout + retest.

23) Cup and Handle

Continuation

Rounded base (cup) + small pullback (handle) → breakout. Confirm: break & close above cup rim.

24) Inverted Cup and Handle

Continuation

Rounded top + small bounce (handle) → breakdown. Confirm: break & close below support.

25) Rising Channel (Up Channel)

Continuation

Parallel upward boundaries. Plan: buy pullbacks to channel support, target mid/top. Exit warning: breakdown close.

26) Falling Channel (Down Channel)

Continuation

Parallel downward boundaries. Plan: sell pullbacks to resistance, target mid/bottom.

27) High Tight Flag

Continuation

Very strong impulse + very tight consolidation. Rule: only trade with strict stops (fast pattern, fast invalidation).

28) Measured Move (Up or Down)

Continuation

A-B impulse, B-C pullback, then C-D continuation similar to A-B. Use: target projection and trade management.

← Previous Next: Wedges + Gaps + Special →
LESSON 4/6 ~14–20 min

3.4 Wedges + Gaps + Special (7)

Key idea

Some patterns are “context-dependent” — they can be reversal or continuation depending on trend and location. Here’s how to treat them with rules.

29) Rising Wedge

Context-dependent

Rising, narrowing structure. Often bearish when it forms after an uptrend. Confirm: break & close below wedge support.

30) Falling Wedge

Context-dependent

Falling, narrowing structure. Often bullish after a downtrend. Confirm: break & close above wedge resistance.

31) Expanding Wedge

High volatility

Widening swings inside wedge lines. Rule: reduce size; trade only with strong confirmation at boundaries.

32) Breakaway Gap

Gap pattern

Gap starts a new move from consolidation. Idea: gap + hold = continuation. If gap fills fast: weak signal.

33) Runaway Gap (Measuring Gap)

Gap pattern

Gap occurs mid-trend. Use: trend strength confirmation + target projection.

34) Exhaustion Gap

Gap pattern

Late-trend gap often followed by reversal or deep pullback. Rule: don’t chase; wait for structure shift + confirmation.

35) Pipe Top / 36) Pipe Bottom

Special reversal

“Pipe” = two strong candles creating a sharp top/bottom. Confirm: follow-through break away from the pipe level. Invalidation: reclaim of the pipe level.

37) Adam & Eve Double Top / 38) Adam & Eve Double Bottom

Variant

Same as double top/bottom but peaks/lows are different shapes: Adam = sharp, Eve = rounded. Confirm: break of the middle swing.

← Previous Next: Harmonics →
LESSON 5/6 ~16–22 min

3.5 Harmonic Patterns (5)

Key idea

Harmonics are ratio-based patterns. Don’t memorize “pretty shapes”. Use zones (PRZ) + confirmation + strict invalidation.

39) ABCD Pattern

Harmonic

A-B impulse, B-C pullback, C-D continuation with symmetry. Use: projection for targets + reversal zones at D.

40) Gartley

Harmonic

Classic harmonic reversal into a PRZ. Rule: don’t enter just because PRZ exists — wait for confirmation candle/structure.

41) Bat

Harmonic

Similar to Gartley but different ratio depths. Best practice: PRZ confluence with key S/R.

42) Butterfly

Harmonic

Often extends beyond the initial swing. Rule: use tight invalidation beyond PRZ + partial profits.

43) Crab

Harmonic

Deep extension pattern that can catch strong reversals. Risk rule: if PRZ breaks cleanly, exit instantly (no hope trades).

Important note (avoid confusion)

In the library below, harmonics count as: ABCD, Gartley, Bat, Butterfly, Crab. That’s 5 patterns. Total module patterns remain 42.

← Previous Next: Confirmation + Risk Plan →
LESSON 6/6 ~14–18 min

3.6 Confirmation + Risk Plan (Non-Negotiable)

Best confirmation ladder

  1. Break + close beyond boundary
  2. Retest of boundary (if available)
  3. Rejection candle / structure shift
  4. Confluence: level, trend, session, liquidity

Invalidation examples

  • • H&S: above right shoulder
  • • Triangle breakout: back inside triangle with strong close
  • • Flag: break opposite side of flag
  • • Harmonics: clean break beyond PRZ

Risk rules (Intermediate standard)

  • • Risk per trade: 0.5%–1% (max)
  • • Max losses per day: 2 (then stop)
  • • Pattern trade must have R:R ≥ 1:2 unless scalping plan is defined
  • • If invalidation hits: exit instantly
← Previous Go to Pattern Library →

Pattern Library (All 42)

Use search + filters to quickly find any pattern. Keep it simple: context → confirm → invalidate → risk.

📝 Go to Workshop
Tip: If you can’t explain the pattern in 20 seconds, you probably don’t understand it yet.
📝 WORKSHOP Module 3 Assessment

Module 3: Workshop & Quiz

Test understanding before moving forward. No signals, no profit promises — just skill-building.

📋 Quick Quiz

1) Best confirmation for a triangle breakout is…

2) A double top becomes valid when…

3) The fastest way to blow an account using patterns is…

🛠️ Practical Workshop

TASK 1: Pattern Screenshot Plan

Pick one pattern you trade (example: bull flag). Write your rules for: context, trigger, entry, stop, target.

TASK 2: False Breakout Defense

Write your “anti-fakeout” rules (example: candle close + retest, avoid low liquidity, etc.).

← Back to Library Continue to Module 4 →

Student Notes (Real)

This section is for real learning notes, not fake marketing claims. Only publish notes with permission.

✅ What I understood

“A pattern is valid only after break + close. Before that, it’s just a possibility.”

— Student note (placeholder)

⚠️ What I struggled with

“I enter too early before confirmation, then I panic when price retests.”

— Student note (placeholder)

🎯 My next step

“I will trade only 1 pattern for 30 days and journal every trade.”

— Student note (placeholder)

Want to submit your note?

Use a form page (example: support.html) to collect feedback. Avoid fake reviews. Publish only verified notes with consent.

🏁

Module 3 Complete

You now have a full pattern system + a library of 42 patterns. Next, we move into deeper execution and advanced structure.

Continue to Module 4 → 📚 Paid Courses 🎧 Mentorship

Reminder: Education only. No guaranteed profits.

↑