Chart Patterns

Chart patterns are recognizable formations formed by price movements on a stock or market chart, indicating potential future trends. These patterns, such as head and shoulders or double bottoms, result from collective investor behaviors and can suggest whether an asset might rise, fall, or consolidate. Traders analyze these shapes to make informed decisions, as certain patterns are believed to signal trend reversals or continuations. While not foolproof, understanding chart patterns helps investors interpret market psychology and improve timing for their trades.