A chart pattern is a shape within a price chart that helps to suggest where prices might go next. There are only two ways, either the trend keeps going (Trend Continuation) or the trend reverses (Trend Reversal).

While some traders primarily trade chart patterns that are statistically significant enough to lead to profits, it is very important to acknowledge the fact that these chart patterns might fail from time to time. This concept is just the same as what we have discussed in section 1 that anything can happen and there always exists an uncertainty in trading. Still, it is worthwhile to learn some popular chart patterns.