Reversal patterns are chart patterns that indicate periods at which the pre-existing trend ends and the trend reverses in the opposite direction. Reversal patterns can be revealed by candlesticks, in which case, these patterns are known as candlestick reversal patterns. Reversal patterns are also defined by the price action of the asset.
Reversal patterns can be of the bullish or bearish variety.Examples of reversal patterns are:
- Head and shoulders (bearish reversal pattern)
- Inverse head and shoulders (bullish reversal pattern)
- Gartley patterns (bullish and bearish)
- Double tops (bearish reversal)
- Double bottoms (bullish reversal)