Top 5 Price Action Patterns Every Trader Should Know

   Top 5 Price Action Patterns Every Trader Should Know

When it comes to trading, price action remains one of the most reliable and widely used strategies. Instead of relying heavily on lagging indicators, professional traders often use price action patterns to understand market sentiment, identify entries, and manage risk effectively.

In this guide, we’ll cover the top 5 price action patterns that every trader — beginner or experienced — must know to improve their performance.

1. Pin Bar (Reversal Candle)

Pin Bars are single candlestick patterns that signal potential reversal zones in the market. They have a small body with a long wick (or shadow), indicating strong rejection of a price level.

Best used in: trending markets and support/resistance zones.

Keyword Focus: pin bar strategy, candlestick rejection, trend reversal

2. Inside Bar

An Inside Bar forms when the entire candle is within the range of the previous candle. This pattern often represents market consolidation before a breakout.

How to trade: Wait for breakout above or below the mother candle. Ideal for breakout traders.

Keyword Focus: inside bar breakout, consolidation trading, price action setup

3. Engulfing Pattern

This powerful two-candle pattern occurs when the second candle completely engulfs the previous one. A bullish engulfing at support or a bearish engulfing at resistance can signal a strong reversal.

Best in: trending markets and key price levels.

Keyword Focus: bullish engulfing strategy, bearish engulfing pattern, price reversal signals

4. Breakout and Retest

This is one of the most traded price action setups. When price breaks a key level (like support or resistance) and comes back to retest it, it often offers a high-probability entry point.

Confirmations: look for wick rejections or reversal candles at retest zones.

Keyword Focus: breakout strategy, retest entry, support and resistance

5. Double Top & Double Bottom

These classic chart patterns signal a potential trend reversal. A Double Top suggests bearish reversal, while a Double Bottom indicates bullish sentiment.

How to use: Wait for neckline break for confirmation.

Keyword Focus: double top pattern, double bottom trading, trend reversal price action

✅ Final Tips for Using Price Action Patterns

• Always confirm patterns with market structure

• Use multi-timeframe analysis for accuracy

• Combine price action with volume or support/resistance

📌 Conclusion

Mastering these five price action patterns can significantly improve your trading results. Whether you’re a day trader, swing trader, or intraday trader, understanding these patterns is crucial in reading charts like a pro.