Session 11 · 4 min read
Bullish Chart Patterns
Six bullish structures — ascending triangle, bull flag, inverse head and shoulders, cup and handle, double bottom, falling wedge — each with entry, invalidation, and a measured target.
These six are the upside counterpart to the four in Session 10 — the same forces, running the other way. Each shape encodes a recurring way buyers gain ground or sellers run out of it.
Patterns are not a substitute for risk rules
Trading these six shapes without the sizing and stop discipline from Session 02 is decorated gambling. A recognisable picture does not make a trade safe — every pattern below still needs a real stop and a sized position behind it.
Core principle
Every shape here records supply being used up: sellers meeting buyers until few remain willing at that price. That takes time. Entering before a base has finished forming is the most common way to lose money on a good pattern.
Ascending Triangle
An ascending triangle forms when each pullback holds higher than the last — a rising line of higher lows — while rallies keep stalling at roughly one price, drawing a flat ceiling overhead.
The ceiling shows steady supply willing to sell at one level. The rising lows show buyers paying more each time to reach it. It resolves when the ceiling gives way, because its defenders have been absorbing more aggressive buying with less room each time.
Ascending Triangle
- Entry
- A confirmed close above the flat ceiling, or the retest of that ceiling from above afterwards.
- Invalidation
- A close beneath the last pullback low inside the triangle, which erases the pattern’s rising floor.
- Target
- Add the triangle’s widest height to the breakout level.
Bull Flag
A bull flag opens with a sharp rally — the pole — followed by a shallow drift back down on thin volume, the flag.
The pole shows buyers in control. The drift is a pause, not a reversal: it lacks the volume and range that would suggest sellers are winning anything back. It typically resolves by continuing the original rally.
Bull Flag
- Entry
- A break above the high of the flag.
- Invalidation
- A close below the flag’s low, which argues the drift was a genuine reversal rather than a pause.
- Target
- Expect roughly another pole’s worth of advance, measured from where the flag broke.
Inverse Head & Shoulders
An inverse head and shoulders is three troughs in sequence: a low, a lower one, and a third that cannot reach the second. The middle trough — the head — is peak seller conviction. The shoulders either side show sellers unable to repeat it.
A neckline across the two highs between the troughs marks the price whose break confirms sellers lost control across all three attempts.
Inverse Head & Shoulders
- Entry
- A close above the neckline, or its retest from above after the break.
- Invalidation
- A close back below the right shoulder, which undermines the case that sellers had exhausted themselves.
- Target
- Measure head to neckline, then add that distance above the neckline.
Cup & Handle
A cup and handle starts with a rounded decline and recovery — the cup — that unwinds gradually rather than snapping back, then a shallow pullback near the old rim, the handle.
The rounded shape shows selling pressure fading slowly rather than reversing at once. The shallow handle shows demand now holding well above where it did on the way down. It resolves when the handle clears and buyers push through the old rim.
Cup & Handle
- Entry
- A break above the high of the handle.
- Invalidation
- A close below the handle’s low, which undercuts the case that the pullback was shallow and orderly.
- Target
- The cup’s depth, added to the rim.
Double Bottom
A double bottom forms when price tests roughly the same area twice and holds both times, with a peak between the attempts.
Two holds is stronger evidence than one, because the level survived even after sellers regrouped. It confirms when price clears the peak, showing the second hold cost sellers more than the first.
Double Bottom
- Entry
- A break above the peak separating the two bottoms.
- Invalidation
- A close below the bottoms, which erases the evidence that support was holding at all.
- Target
- The rise from the bottoms to the peak, repeated once more above the peak.
Falling Wedge
A falling wedge is two downward-sloping trendlines converging as they descend. Highs and lows are both falling, but the lows fall more slowly, squeezing the range narrower with every swing.
The squeeze is the signal. Sellers still own the direction, but each new low costs more effort — fading momentum, not fading intent. It usually resolves with a break above the upper line as the last sellers run dry.
Falling Wedge
- Entry
- A break above the upper trendline of the wedge.
- Invalidation
- A close below the wedge’s low, which undoes the fading-momentum case the converging lines were making.
- Target
- The wedge at its widest, back where the pattern started, added to the breakout point.
Use those numbers as a starting template and let your own journal adjust them. What a fixed rule buys is not accuracy — it is the ability to compare one trade against the next on the same terms.
And the discipline does not relax because the trade is a long. A stop is not optional just because the loss can only reach zero.
Put it into practice
Reading builds knowledge; journaling builds skill. Track your trades and see your own patterns.
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