Level 8
Reversal patterns
By the end of this level you can recognise the marks of a tiring trend — double tops, double bottoms, head and shoulders — and you will have internalised that a pattern only exists once it completes.
In this level
- A trend running out of breathReversal patterns are structures that appear at the end of a trend and depict the POSSIBILITY of a change in direction. The core difference from continuation patterns is context…
- Double tops and double bottomsA double top forms when, at the end of an uptrend, price hits the same resistance area twice and turns back both times; on the chart it resembles the letter "M". The horizontal…
- Head and shouldersThe head and shoulders is the most famous reversal pattern, built from three peaks: the middle one (the head) stands taller than the two beside it (the shoulders). The line…
- The discipline of completionThis level's one-sentence summary: an incomplete pattern is not a pattern. Candidate structures form constantly, and most never complete — double-top candidates get erased by a…