Most Frequently Occurred Price Patterns In Forex Trading


If you are a long term trader, then you should have a close eye on various price patterns that occur frequently at various timeframes. These patterns may yield huge and easy return with minimum risk. Let us have a look at some famous price patterns.

Head & Shoulder (H&S)

H&S is one of the most frequently occurred price patterns. It consists of four main parts that are:

  • Left Shoulder
  • Head
  • Right Shoulder
  • Neckline

The most important component is the neckline. Neckline is the lowest point between right and left shoulder as shown in following chart.


Traders tend to open sell positions when neckline is broken. Once neckline is broken, it then acts as critical resistance level. H&S pattern can also be in inverse shape as shown in following chart.


As obvious from above chart the only difference in inverse H&S pattern is that it is bullish price pattern, that’s the reason why traders tend to open buy positions when neckline of inverse H&S pattern is broken.

Double Top & Double Bottom Price Patterns

Double top price pattern signals bearish reversal while double bottom shows bullish reversal as obvious from following chart.


Just like H&S pattern, it also has a neckline. A breakout through neckline is considered a confirmation for reversal and positions are opened at this stage with stop loss placed just above the neckline. Target can be up to bottom of corresponding wave as shown in above diagram.

Symmetrical Triangles

Symmetrical triangles are also very common in daily trading. In uptrend markets, mostly upside breakout occurs and in downtrend markets, usually downside breakout occurs.


In symmetrical triangles, breakout trading is more successful as compared to pullback trading. A trader should open a position when breakout occurs. False breaks are very common in symmetrical triangles so you should wait until four-hour or daily candle is closed above or below trend-line.

ABCD Pattern

It is another commonly observed price pattern. ABCD pattern can be bullish or bearish as shown in following diagram.


Price normally takes 61.8% retracement in wave C of both bullish and bearish ABCD patterns. No action should be taken until size of wave D is matched to wave A. Target of a position can be just ahead of peak level of wave C.

Above mentioned price patterns may occur at any timeframe however you should avoid trading these patterns at timeframe lesser than one hour. The higher the timeframe, higher will be reliability of a price pattern. Similarly premature entry must also be avoided, for example if you are trading H&S or double top price pattern, you must not open a position until neckline is broken.

Moreover, patience is very much needed while trading price patterns. Many of these patterns may take days, weeks or even months for completion, particularly when they occur at higher timeframe. So always be patient and never close your trade before completion of a price pattern.

This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.

Latest from Trading Strategies

What Is Position Trading? Definition and Examples What Is Swing Trading? How to Trade in Ranges: Range Trading Strategies Forex Money Management Strategies How to Trade Breakouts

Latest articles

Forex Analysis

Market Analysis: American Currency Rises Sharply after Fed Meeting

As expected, the decision on the interest rate had a powerful impact on the markets. Thus, the euro/US dollar pair lost more than 100 pp in just a couple of hours and updated its recent low at 1.0630,


Oil Analysis: Finally, A Bearish Reversal?

The policy of OPEC+ countries to voluntarily reduce oil production was one of the drivers thanks to which the price of WTI oil increased by approximately 40% from its low in June. In such cases, it is appropriate to use


Central Bank Week Shakes Up Gold Market

Yesterday, the main event of the week took place — the Federal Reserve meeting, which had a noticeable impact on the market of assets denominated in US dollars. But besides the Fed meeting, there are a number of other events this

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 60% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.