One of the most powerful skills in trading is identifying market reversals before they happen. Catching turning points early can mean entering big trends at the right time — and avoiding costly traps. In this post, I’ll break down the most effective reversal patterns and show you how to spot them like a pro.
Reversal patterns are technical formations that signal a possible change in the current trend — from bullish to bearish or vice versa. Unlike continuation patterns, these indicate that momentum is shifting.
Double Top: Bearish reversal after an uptrend
Double Bottom: Bullish reversal after a downtrend
Look for neckline break confirmation
Highly reliable bearish reversal pattern
Watch for volume confirmation and neckline breakout
Bullish counterpart to head and shoulders
Often seen at the end of a downtrend
Morning Star: Bullish three-candle pattern
Evening Star: Bearish version, often forming near resistance
Don’t just trade the pattern — confirm it with:
RSI divergence (momentum fading)
MACD crossovers
Volume drop on final push
Support/resistance retests
Combining patterns with indicators increases accuracy.
Use higher timeframes to avoid fakeouts
Always define your stop-loss — reversals can fail
Wait for candle close above/below neckline for confirmation
Combine patterns with price action for stronger entries
Mastering reversal patterns gives you an edge. When you can anticipate a market turning point, you’re no longer chasing trends — you’re leading them. Keep practicing, stay patient, and remember: confirmation is key.
