Chart Patterns Encyclopedia: Flags, Pennants, Triangles, Wedges, Channels, and Breakout Structures

Encyclopedia Classification

Category: Technical Analysis • Price Structure • Continuation Patterns

Discipline: Pattern Recognition • Breakout Trading • Market Psychology

Prerequisites

• Article 195 — Price Action Trading: Candlesticks, Market Intent, and Reading the Story Behind Every Move

• Article 194 — Market Structure Analysis: Trends, Breaks of Structure, Reversals, and Multi-Timeframe Frameworks

• Article 197 — Support and Resistance Mastery: Institutional Levels, Liquidity, and Dynamic Price Zones

Related Articles

Volume Analysis • Liquidity Analysis • Market Structure • Trend Analysis • Breakout Trading • Risk Management

Definition

Chart patterns are recurring price formations that represent the behavior of buyers and sellers during periods of:

• Trend continuation.

• Consolidation.

• Accumulation.

• Distribution.

• Potential reversal.

Chart patterns attempt to identify:

• Market compression.

• Momentum shifts.

• Breakout opportunities.

• Failed auctions.

The central idea:

Price patterns are visual representations of market psychology: expansion, hesitation, accumulation, and renewed participation.

Beginner Explanation

Markets usually move in two phases:

Expansion

Strong movement.

Example:

Bitcoin:

\$80,000 → \$100,000

Consolidation

Market pauses.

Example:

Bitcoin:

\$95,000–\$100,000

Chart patterns often represent the transition between these phases.

Compression creates potential energy.

Expansion releases it.