Patterns in charts: the silent compass of the crypto trader

If you've been watching candles on TradingView for a while, you know this feeling: the price goes up, down, up, down… but always following a pattern. Classic chart patterns are exactly that: the market's “DNA” repeated over and over.

Why Patterns Work

It's not magic. It's market psychology. When thousands of traders see the same thing on the chart, their decisions synchronize. The price bounces off resistance, sellers enter. It falls to support, buyers rescue. These movements create predictable formations.

There are two main categories:

Reversion (game changer)

• The price was rising → it is going to drop
• The price was going down → it's going to rise

Continuation (continues the wave)

• The price pauses, breathes, and continues in the same direction

Patterns That Work

Double Top / Double Bottom

The price hits the same level twice and rebounds. If it's a ceiling (two highs) → bearish signal. If it's a floor (two lows) → bullish signal. Confirmation comes when it breaks that level.

Head and Shoulders

Three peaks: the middle one is the highest (head), two on the sides are the lowest (shoulders). When the price falls below the line connecting the shoulders, it's time for the bulls to leave.

Banners and Pennants

The price rises or falls sharply (to), consolidates in a rectangle (flag) or triangle (pennant), and then continues. Useful for catching the second wave of the movement.

Triangles

• Bullish: support rises, resistance flat → likely bullish breakout
• Descending: flat support, low resistance → likely bearish breakout
• Symmetrical: lines converge, could go in any direction

How to trade this without losing money

Step 1: Wait for the pattern to close Do not rush. If you are halfway through the training, wait. Novice traders enter too quickly.

Step 2: Entry on the breakout Buy when it breaks resistance (bullish) or sell when it breaks support (bearish). The volume must be there.

Step 3: Target and stop

• Target: measures the height of the pattern and projects it from the breakout point
• Stop: place it just behind the level you broke ( with a cushion of 2-5%)

Step 4: Controlled risk Do not expose more than 1-2% of your capital per trade. Keep the risk/reward ratio at least 1:2.

The inconvenient truth

Patterns are NOT a guarantee. Especially in volatile markets (like April/May in crypto), they can fail. They also require:

• Patience: waiting for full formation takes weeks sometimes
• Confirmation: a divergent RSI or a strong MACD adds credibility
• Context: if Bitcoin is in a crash, bullish patterns in alts are traps

The formula that works

Classic patterns + RSI + MACD + volume = solid foundation. It's not infallible, but it's much better than trading randomly.

My advice: practice in paper trading for 2-3 months identifying these patterns. You will see how they appear everywhere once you know what to look for. Then, when you have clarity, enter with real money but with small tickets.

Trading is not won in a day. It is won with discipline and recognizing that price history repeats itself.