Let's talk about technical analysis. more specifically: price action patterns. You know, Bull Flags Bear Channels Arctic Tundra Yeti Monsters. As a side note, who gets to name these things I Really want that job anyway? I Think it's pretty safe to say pretty early on into your trading career, you start to hear all about these patterns and when to trade them.

when not to trade them. And yada yada yada. I Always thought it was pretty interesting that we just accepted these as truth as the gospel of trading. As soon as you see these patterns, apparently, we're supposed to trade them.

I Suppose my untrusting nature got the better of me so I decided to look into it I Wanted to know what are the actual best patterns and what are patterns that maybe we talk about a lot that aren't actually that good very quickly before we get into the list of the best and the worst technical analysis Price patterns. Don't forget to hit the like button and don't forget to subscribe. With that being said, let's rock! I Want you to know that the statistics I'm about to share with you were achieved by testing 10 years worth of trading data and over 200,000 different patterns and obviously a shout out to Samurai trading for putting all this together. Coming in at number seven is the classic Bull and Bear Flag Pattern Most Traders would refer to this as a continuation setup in a bull flag pattern.

You'd be trending upwards, then you would have a downward consolidation denoted by two parallel lines, and then from there you would get an upward breakout. hence the continuation, and then obviously a bare flag pattern would be the exact opposite. This pattern is considered to be successful if the secondary move covers the same or more distance as the very first leg that led to the consolidation. Both bull flags and bare flags have roughly a 67% success rate.

Next up is the triangle pattern. An ascending triangle would have two or more equal Highs, but the lows on all the downturns would slightly get higher and higher and higher and hopefully lead to a breakout. And if you want to know what a descending triangle would look like, you just need to flip it upside down. You would have two or more equal lows with the highs getting lower and lower and lower.

and then eventually you wouldd have a breakdown. This pattern is considered to be successful if the breakout or breakdown goes the same distance or more than the width of the pattern itself. Both the ascending and descending triangle pattern have a hit rate just below 73% Number Five is the channel pattern. You might be thinking to yourself, hey man, what gives We just saw this with the bull flag and the Be flag.

What's going on on here and you're right. They are very similar, but there are some important differences for the purpose of this video. This particular pattern is different because the range of the consolidation is not only longer but also wider. Similar to before.

This pattern is considered to be complete when the breakout or breakdown leg goes the same distance or more as the initial leg that led to the consolidation. So I suppose the best way that we could think about this is a channel pattern is functionally just more painful. Longer duration, full or bare flap. But luckily for us, that extra pain and patience is actually worth it because this pattern hits with a 73% accuracy.

Now we get to talk about double tops and double bottoms. a reversal pattern that I see all over the place on both Twitter and Reddit. A double top is essentially just an M formation. You Trend upward, make a new high, come down, make a new higher low, and then you Trend back up to that exact same high and then you get rejected.

That actually reminds me a lot of my junior. Hello Darkness, my old. Maybe we should just move on. A double bottom is the same thing if you flip it upside down.

So instead of making an M now you're making a W. For the purpose of this study, this pattern is considered to be a success if the breakout or breakdown goes the same distance from the high or the low to That Swing midpoint. Double tops happen to work 75% of the time and double bottoms happen to work 78.5% of the time and coming in at number three. What's better than a double bottom and a double top? Obviously, a triple bottom and a triple top? you don't need to be Jesse Livermore to realize that this is just one more rejection, which is now reminding me of senior prom one is theonest.

But anyway, the measurement of success is the same. Does the breakout or breakdown go the same distance as the width of the consolidation? And statistically, it turns out that one more rejection can really help you. Triple tops work 77.6% of the time while triple bottoms work over 79% of the time. And in this silver metal place, we have the rectangle pattern.

A bullish rectangle is when the price is trending upwards, then it goes perfectly sideways, same highs, same lows, and then continues to the upside. And a bearish rectangle is when you're trending downwards and then you consolidate sideways, same highs, same lows, and then you continue downward. This pattern is considered to be a winner if the breakout and/ or breakdown goes the same distance or more as the width of the consolidation. For for those of you keeping score, bullish rectangles work 78% of the time, while bearish rectangles work 79.5% of the time.

And now it's time for the absolute best trading pattern that we should all be taking advantage of at least according to both math and history. And the winner is the old head, shoulder, knees, and toes. Well, not exactly the knee. and Toes, but definitely The Head and Shoulders.

You know what I'm talking about. When the price action goes up. it comes down, makes a neckline, makes a new high, comes back down to that exact same neckline, then goes up to that very first High which then leads to a breakdown or you can flip it upside down and you'd have an inverted Head and Shoulders. This trade is considered to be a winner if the breakout or breakdown of that neckline goes the same distance or more as the height of the head all the way down to the neckline.

both the normal and inverted Head and Shoulders Works roughly 83% of the time. And now it comes to the awkward part of the video. You're probably thinking to yourself, you just gave us the best pattern that was number seven and based on what you said in the title, you were going to give us 10 different patterns. What gives? Yeah, I Just I Don't know I Thought it was a good thing to say I Thought it was a good title, but as an apology from me I Do want to let you know a little bit more of a dishonorable mention.

one pattern that a lot of people talk about, but statistically isn't that good. I'm talking about Penance Not that thing where you ask your priest for forgiveness, but rather that thing where the price action's going up. Then you have lower highs, higher lows. kind of looks like sideways triangle and you break upward.

That would be a bullish pennant and then obviously a bearish pennant would be the exact opposite thing. I'm starting to sound like a bit of a broken record, but success in this pattern is defined when the breakout or breakdown goes the same distance or more as the first leg that led to the consolidation. Personally I Found this to be very surprising, but bullish and bearish penants only work roughly 55% of the time. Slightly better than flipping a coin.

So there you have it, the top 10 trading patterns and we only have to cover eight. I Hope you enjoy this If you want me to make more videos like this where I do a mathematical breakdown of either trading strategy, setups or anything related to that, let me know in a comment below obviously I want to make whatever content you guys truly enjoy. so don't forget to hit the like button and don't forget to subscribe I'll catch you in the next video.