Bullish Chart Patterns

What makes a pattern bullish

A chart pattern is a shape that price traces over a number of bars. People give shapes names so they can talk about them. A pattern is called bullish when the usual reading of its shape is that buyers are gaining the upper hand. That is the only meaning of the word here. It is not a forecast.

There are two families. A reversal pattern appears after a fall and is read as a sign that the fall may be ending. A continuation pattern appears during a rise and is read as a pause before the rise resumes. A double bottom is a reversal shape. A flag is a continuation shape. Both are called bullish because of how they are read, and the same shape can fail in either family.

Most patterns share a few parts. There are swing highs and swing lows, which are bars whose high or low stands out from the bars on either side. There is a line, drawn through some of those points, that price has to cross for the pattern to count as complete. And there is often a target, found by copying the height of the pattern from that line. For the wider field, see chart patterns.

Common bullish patterns

This table gives one line of meaning for each. It describes the shape and the usual reading. It does not rank them or say any of them works.

Several names overlap in practice. A cup and handle and a rounding bottom look alike, and a flag and a pennant differ mostly in whether the pause has parallel lines or converging ones. That blur is a first sign of how much judgement is hiding in each label.

Why the label is a reading, not a promise

The word bullish sounds like a claim. It is closer to a description of a mood. Three things stand between the label and any result.

• The same shape ends in different ways. A double bottom can be followed by a rise, by a drift sideways, or by a third low. The name does not change the outcome.
• The shape is only complete in hindsight. At bar 22 in the example below, the chart is just a second dip. It is called a double bottom only after the close above the neckline, and by then part of the move has already happened.
• The shape is a choice. Two people can draw different lines on one chart. How level must the lows be, and does the line touch wicks or closes? The label looks fixed, but it depends on how it is drawn.

This page makes no claim about how often any pattern is followed by a rise, or whether trading one makes money. That is a number to measure, with costs, on your own data. Reading an old chart with the whole chart in view also invites look-ahead bias, which is why patterns look so clean in articles.

A worked example with made-up numbers

Take a made-up chart of 33 bars with a double bottom. The first low is 50.00 on bar 8. Price bounces to a peak of 58.00 on bar 15, then falls to a second low of 50.40 on bar 22. The first close above the peak is 58.60 on bar 27. Every figure here is made up.

The pattern height is the peak minus the lower low, which is 58.00 minus 50.00, or 8.00. The common rule adds that height to the neckline, so the target is 58.00 plus 8.00, or 66.00. From the break close of 58.60, that is 7.40 points. The second low is 8.20 points below the break close, so the distance to the target is 0.9 times the distance to the second low. All of it was calculated by us on 31 Oct 2026, exact.

The arithmetic is tidy. The chart is not real. In a real chart the lows would rarely be this close, the break might come after a retest, and spread and slippage would cut into any gain. They are left out here to keep the count clear.

The bearish list, briefly

Each bullish pattern has a bearish partner, drawn upside down and read as favouring a fall.

• Double top, the mirror of the double bottom.
• Head and shoulders, the mirror of its inverse form.
• Rounding top, the mirror of the rounding bottom.
• Rising wedge, the mirror of the falling wedge.
• Bear flag and bear pennant, the mirrors of the continuation shapes.
• Descending triangle, the mirror of the ascending triangle.

Do not assume a bearish pattern behaves like a mirror image of its bullish one. Markets are not symmetric, and a bot should test each side by itself.

How a bot would test one

A bot needs a rule that gives the same answer every time it runs on the same data. To test a bullish pattern, the steps are these.

• Write the definition as numbers. The swing length, how far apart in price the two lows may be, the longest the pattern may take, and what counts as the break: a touch, a close, or a close and a retest.
• Mark swings only when they are confirmed. A low defined over 5 bars either side is only known 5 bars later. A test that marks it on the day it happened has looked ahead.
• Fix the exit before the entry. Decide where the trade ends if it fails and where it ends if it works. The target above is one choice. See stop-loss order.
• Count every match. Include the ones that failed, and record each result after costs. A strict definition finds few matches, so the count may be too small to say much.
• Keep data back. Hold a final stretch untouched and run the rule on it once. See how to backtest and overfitting.

A pattern rule rarely stands alone. People often add a trend filter or a momentum reading such as RSI. Each addition is another setting that can fit the past by luck.

What this does not tell you

It does not say how often a bullish pattern is followed by a rise, whether a target is reached, or whether any rule built on one makes money. The example is a single made-up chart. A real answer needs many matches, real costs and data the rule has not seen. This page is education only.