---
title: "Reversal Chart Patterns, Explained - Get Funded Now"
description: "Reversal patterns are chart shapes read as a trend possibly ending: head and shoulders, double tops and wedges. How they differ and what confirms them."
url: "https://getfundednow.com/learn/reversal-patterns"
language: "en"
last_modified: "2026-09-22"
publisher: "Get Funded Now (getfundednow.com)"
translations:
  es: "https://getfundednow.com/es/learn/reversal-patterns"
  pt-BR: "https://getfundednow.com/pt-br/learn/reversal-patterns"
  fr: "https://getfundednow.com/fr/learn/reversal-patterns"
  it: "https://getfundednow.com/it/learn/reversal-patterns"
  de: "https://getfundednow.com/de/learn/reversal-patterns"
disclosure: "All trading at Get Funded Now is simulated. 'Funded' means a simulated or virtual account; GFN is not a broker and does not hold client funds."
---

Chart patterns

# Reversal patterns: shapes read as a trend ending.

Reversal patterns are chart formations that traders read as a sign an existing trend may be ending, as opposed to continuation patterns, which suggest a pause. The best known are the head and shoulders and its inverse, double tops and bottoms, and rising and falling wedges. Each is considered confirmed only when price breaks a defined level.

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## The main reversal patterns

Each has a bullish and a bearish form, and each has a level whose break confirms it.

**Reversal patterns and their confirmation**

| Pattern | After | Confirmed by |
| --- | --- | --- |
| [Head and shoulders](https://getfundednow.com/learn/inverse-head-and-shoulders) | An advance | A close below the neckline |
| [Inverse head and shoulders](https://getfundednow.com/learn/inverse-head-and-shoulders) | A decline | A close above the neckline |
| [Double top (M)](https://getfundednow.com/learn/double-top) | An advance | A close below the trough between the peaks |
| Double bottom (W) | A decline | A close above the peak between the lows |
| [Rising wedge](https://getfundednow.com/learn/ascending-wedge) | An advance | A close below the lower line |
| Falling wedge | A decline | A close above the upper line |

## Reversal vs continuation

A continuation pattern - a flag, pennant or many triangles - is read as a pause before the trend resumes. The same shape can be either: a rising wedge inside a downtrend is usually read as continuation, and at the top of an uptrend as reversal. What precedes the pattern decides which it is taken to be.

## Why confirmation matters

Most shapes that look like the start of a reversal pattern never complete. Waiting for the confirming break gives up some of the move in exchange for filtering out many of those failures. Even confirmed patterns fail, which is why every pattern also needs an invalidation level. [Divergence](https://getfundednow.com/learn/divergence-trading) is often used alongside them as evidence the trend is losing momentum.

Step by step

## How to identify it

Treat a reversal pattern as a hypothesis until its level breaks.

1. Confirm there is a trend to reverse.
2. Identify the pattern and its confirmation level.
3. Wait for a close beyond that level.
4. Set the invalidation level before entering - usually beyond the pattern's last extreme.

Worked example

## The concept, walked through

### A reversal that fails, described

An illustrative sequence in words, with round numbers standing in for price. It is not taken from any real instrument or date.

1. 1. Trend Price rises from 80 to 110.
2. 2. Pattern It forms two peaks near 110 with a trough at 104 - a possible double top.
3. 3. Outcome Instead of breaking 104, price rallies through 110 to 116.

The shape never confirmed, so a trader who waited for the break below 104 never entered. One who sold the second peak was stopped out above 110.

Common mistakes

## Where traders go wrong

### Trading before confirmation

Most candidate reversals do not complete.

### Seeing reversals in every pause

Trends pause often without ending.

### Ignoring the higher timeframe

A reversal on a low timeframe may be a small pullback in a larger trend.

Limitations

## What it cannot tell you

No chart concept predicts price. These are the limits worth keeping in view.

- Patterns are identified with judgement and often only clearly in hindsight.
- Published success rates are for particular markets and periods and may not apply to what you trade.

In an evaluation

## Using it on a simulated account

On a $100,000 simulated account the daily loss limit is $3,000 on Instant or $5,000 on 1 Step and 2 Step. Pattern stops are often wide, so size from the stop distance first - risking something like $500 a trade - rather than from how clean the pattern looks.

- [What is the daily loss limit?](https://getfundednow.com/rules/daily-loss-limit) - Trading rule - The ceiling on a day's losses - 3% on Instant and 5% on 1 Step and 2 Step.
- [What is maximum drawdown?](https://getfundednow.com/rules/max-drawdown) - Trading rule - The overall floor beneath the account.
- [Does slippage excuse a breach?](https://getfundednow.com/rules/slippage-and-spreads) - Trading rule - Breaks of pattern levels are where fills slip.

Questions

## Asked about this concept

Chart formations read as a sign that a trend may be ending, such as the head and shoulders, double top and bottom, and rising and falling wedges.

A reversal pattern suggests the trend may end; a continuation pattern suggests a pause before it resumes. The preceding trend decides how a shape is read.

Keep learning

## Related lessons

- [Chart and candlestick patterns](https://getfundednow.com/learn/inverse-head-and-shoulders) - Inverse Head and Shoulders Pattern - Three troughs with the lowest in the middle, a neckline across the rallies between them, and a break above it - the pattern and its limits.
- [Chart and candlestick patterns](https://getfundednow.com/learn/double-top) - Double Top Pattern (the M Pattern) - Two failed attempts at the same high - how the M pattern is drawn, what confirms it, the double bottom mirror, and its limits.
- [Chart and candlestick patterns](https://getfundednow.com/learn/ascending-wedge) - Ascending Wedge (Rising Wedge) Pattern - Two rising, converging trendlines that are usually read as a weakening advance - how a wedge differs from a triangle, and how it resolves.
- [Chart and candlestick patterns](https://getfundednow.com/learn/bullish-candlestick-patterns) - Bullish and Bearish Candlestick Patterns - The candlestick patterns traders name most often - single, two- and three-candle, bullish and bearish - and what each is taken to show.

Sources

## What this page relied on

1. [Chart pattern](https://en.wikipedia.org/wiki/Chart_pattern) - Wikipedia. Retrieved 23 September 2026. The distinction between reversal and continuation patterns and the common examples of each.
2. [Head and shoulders (chart pattern)](https://en.wikipedia.org/wiki/Head_and_shoulders_(chart_pattern)) - Wikipedia. Retrieved 23 September 2026. Construction of the pattern and its inverse, the neckline, and the measured-move convention.
3. [Double top and double bottom](https://en.wikipedia.org/wiki/Double_top_and_double_bottom) - Wikipedia. Retrieved 23 September 2026. The definition of the double top, its confirmation below the intervening trough, and the measured move.

Educational content only, not investment advice or a recommendation to trade. Chart concepts describe what price has done; none of them predicts what it will do, and trading any strategy can lose money. Get Funded Now accounts are simulated and trade virtual funds. Last reviewed 22 September 2026.

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Source: https://getfundednow.com/learn/reversal-patterns
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