With chart patterns, they are based on similar requirements and traits. Chart patterns all need to be confirmed before they are considered a chart pattern. Chart patterns all give us a target price to be reached once the pattern is confirmed. Each pattern has a mirror opposite. Patterns are essentially determined by support and resistance levels.
For a bullish pattern, the price will have to break through a resistance level to confirm the pattern. For a bearish pattern, the price will need to break support levels. A key point to remember is that support and resistance is not always a horizontal line. In many instances, these levels will be a diagonal line based on high and low points.
The target price will be determined by measuring the distance between the widest points of the pattern. The distance will then be added to the confirmation point which is either the resistance or support levels that were broken.
According to a study done by autochartist.com, the most successful patterns are the head and shoulders and its mirror opposite, inverse head and shoulders, which reached its target 84% of the time. The next best patterns are the double, triple bottoms, triple top and the rectangle patterns that reached its target 79-81% of the time.
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