Reversal chart patterns form when a dominant trend is about to change course. The chart patterns signal that a prevailing trend’s momentum has faded, and the market is about to reverse. The most common reversal chart patterns include straight and reverse head and shoulders, double tops and double bottoms, falling and rising wedges, as well as triple tops and triple bottoms. Reversal chart patterns happen after extended trending periods and signal price exhaustion and loss of momentum. You can open a buy position when the price, having broken through the resistance levels of the formation, reaches or exceeds the local …