Watch the full video here: Ultimate Beginners Guide to Candlestick Patterns, Support/Resistance & Technical Indicators | Ep. 4
Understanding Patterns Changed My Trading
When I started out, I wasn’t profitable. Like most new traders, I made emotional decisions, jumped into random setups, and traded based on hope instead of strategy. What changed everything for me was learning how to read chart patterns.
These aren’t just lines and shapes — they’re windows into trader psychology. They tell you who’s winning the tug-of-war between buyers and sellers, and they repeat themselves constantly. If you can recognize even half of a pattern forming, you can often anticipate the next move.
In this post, I’m breaking down eight trading chart patterns and setups that I use in my own live trading. These are real strategies I apply every day — not textbook theory. Whether you’re just starting out or refining your edge, these are the patterns I’d put at the top of your study list.
Let’s get into it.
Momentum Continuation Patterns
These are setups I trade when the market’s hot and stocks are moving fast.
1. Bull Flag
This is the first pattern I mastered. It’s a powerful continuation pattern: strong move up (the flagpole), followed by a small pullback or sideways consolidation (the flag). I want to see that pullback on lighter volume, and then the next leg up kicks off when the stock breaks the flag’s upper resistance.
Bull flags are my bread and butter. When I see strong volume on the front side and it pulls back cleanly, I’m all over it.
The stop typically goes under the base of the flag, and I aim for a 2:1 or better profit-to-loss ratio.
2. Micro Pullback
This one’s harder to catch unless you’re fast — I’m usually looking at 10-second or 1-minute charts. It’s a tiny pause that happens during an explosive breakout. You might only see it as one small red candle or even a doji before the move continues.
People ask how I got in on a giant green candle — usually, it was a micro pullback in disguise.
I often spot these around whole dollar levels — they let me sneak in early with a tight stop.
Reversal or Caution Patterns
These patterns tell me to slow down. They can signal weakness or a potential change in trend.
3. ABCD Pattern
This one forms when a stock spikes, pulls back, builds a higher low, and then finally breaks out. A is the move up. B is the pullback. C is where we hold support. D is the breakout.
ABCDs often form when bull flags fail. It’s the market catching its breath.
I’ll usually enter near point C with a tight stop or wait for the breakout confirmation at point D if the volume looks strong.
4. Doji Candlesticks
I pay close attention to dojis and their variants: spinning tops, gravestone dojis, shooting stars, and hanging men. These show up after strong moves — especially to the upside — and signal indecision or weakening momentum.
This is like getting cold feet at the altar. A candle like that can be your warning shot.
These candles don’t mean much when the stock’s going sideways, but at the top of a rally? That’s a red flag.
5. Head and Shoulders
Even if I just see the first half of this pattern forming — a peak, then a pullback, then a second, higher peak — I know what might be coming next. This setup shows that buyers are losing control.
If I see half a head-and-shoulders, I already know what the other half looks like.
The breakdown usually happens when the price falls below the neckline; that’s where I bail or short.
6. Double Top / Double Bottom
When a stock tests the same level twice and fails, that’s a sign of strong resistance or support. In a double top, I look for the second peak to come in on lighter volume — that tells me the momentum is dying.
Same goes for a double bottom — I watch for confirmation before jumping in, but it can be a strong reversal signal.
If buyers can’t break a level twice, I stop trusting the move.
Execution-Based Setups
These aren’t patterns in the textbook sense, but I trade them like they are.
7. Breakout or Bailout
This is a philosophy I follow in every trade. If the breakout doesn’t happen fast, I’m out. Period. No hoping. No holding.
If it’s not going up, I’m not holding and hoping. I bail.
Sometimes, I get in just before the breakout, and if it stalls? I’m out for break even or a small loss, avoiding the bigger flush.
8. Whole Dollar / Half Dollar Levels
These price points — like $1, $2, $5, or $7.50 — act like magnets. A lot of traders place buy and sell orders right at these levels. I use them for entry points, exits, and stop placement.
I love buying off $2 or $7. These levels magnetize volume.
If a stock is running and holding a whole dollar or half dollar, I see that as psychological support — especially when volume lines up.
Final Thoughts: Print These Patterns, Watch the Charts
These patterns aren’t theories — they’re battle-tested setups I use in live trades with real capital. I’ve built my strategy around recognizing these in real time. That only happens from screen time, watching chart after chart.
If you’re just getting started, focus on one or two of these patterns first. Print out my PDFs. Keep them by your desk. Watch the price action. Rewatch the video. The more you recognize them, the faster your instincts will sharpen.
Even seeing half a pattern is enough, because I already know how the story ends.
You don’t need to memorize them all, but you do need to start seeing them live.
Want to start spotting these patterns in real time? Download my Micro Pullback Strategy and Technical Analysis Guide.