What are the best day trading patterns for beginners? The easiest to learn patterns are the falling wedge, rising wedge, bull flag breakout, and cup and handles. The cool thing about trading patterns is that they happen repeatedly, and you can fall in love with or even marry them. Regardless, if you’re new to trading, you’ll quickly realize there are more patterns to trade than sand at the beach, so you must pick your favorite.
You can find the best day trading patterns for beginners on both intraday chart setups and all other timeframes. Day trading is fast-paced. When you’re a new trader, it can be overwhelming. Finding the best day trading patterns for beginners can help clear up the chart and direction you need to trade.
Whether you’re looking for bullish chart patterns or bearish ones, make sure you can spot them. If you’re not a floor trader and are just starting trading, here are a few of the best day trading patterns for beginners.
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Table of Contents
Best Day Trading Patterns for Beginners
- Bull Flag patterns
- Harami patterns
- Pennant patterns
- Falling wedge patterns
- Bottom patterns, i.e., double and triple
- Top patterns, i.e., double and triple
- Cup and handle pattern
- rising wedge stock pattern
This is a day trading pattern of a hammer on a 5-minute chart of $MTCH. It formed an intraday double bottom pattern near support and then broke out. The bigger patterns were a cup and handle, which turned into a rising wedge.
1. Day Trading Hammer Patterns
The hammer is a candlestick where the wick is considered twice as long as the body. Also, at times, there can be very little or even no wick above the body!
A hammer candlestick is typically found at the base of a downtrend or near support levels. We, traders, like hammer candlesticks because they’re a sign that a reversal is about to happen in the price direction of a stock.
Reversals can be by themselves or a part of the best trading patterns for beginners. As a result, look at the big picture too.
2. Day Trading Engulfing Patterns
In simple terms, the Engulfing candlestick pattern is when the second candle’s body covers the whole body of the previous candlestick. I
It’s important to remember that the Engulfing candle must cover both the body and wick of the previous (first) candlestick.
Undoubtedly, the bullish engulfing candle is one of the best candlestick patterns to signify a reversal in the market. When spotted, the buyers or sellers have been aggressive enough to bring the price back to a level beyond the extreme level of the previous day.
It is crucial to realize that not all Engulfing Patterns mean something. For starters, for a bullish Engulfing Pattern to signal a reversal, it must appear after a significant drop in the price.
Likewise, for a bearish Engulfing Pattern to be considered valid, it must appear after a large price increase.
As mentioned above, candlesticks come together to form a pattern. And it’s your job to identify the best day trading patterns for beginners so you can make money.
3. Day Trading Bull Flag Patterns
A bull flag is probably the easiest pattern to learn. It’s probably the most popular too. It’s considered a bullish continuation chart pattern and a sign that the market will advance. In no uncertain terms, the bull flag pattern is one of the most common patterns found on charts.
Here’s how to spot one:
- Look for a strong move up on high relative volume. In this scenario, the candle range is bullish than usual, closing near the highs.
- A “break” and consolidation near the top of the pole, foriformflag.
- A “breakout” of the consolidation on high relative volume, continuing the upward trend.
This is a typical bull flag using simple bars. Notice the big green flag pole, followed by the red consolidation lines. Then, the price broker out of the flag to continue the move up.
Meaning of Candlesticks
Before you can start to identify the best day trading patterns for beginners, you need first to understand what makes up the patterns in the first place.
Just like every human has different DNA, every pattern has different candlesticks. Some DNA combinations result in blue hair, others in red hair.
Likewise, combinations of candlesticks show us patterns so we can make educated trading decisions. Here are two of my favorite candlesticks that help me in my trading decisions: the hammer and the engulfing candlestick pattern.
Versatility
What I like about bull flag patterns is their versatility; you can use them on any time frame for any trader.
For example, scalpers might use the two and 5-minute time frames to catch quick price fluctuations. Alternatively, swing traders can also use the bull flag pattern on the daily chart.
In my experience, the best time to trade the Bull Flag Pattern occurs just after a breakout.
Furthermore, they are the perfect pattern for new traders because they are easy to spot and trade once you understand their ins and outs.
Final Thoughts
The main thing to look for in any pattern is volume. Volume confirms major moves and the likelihood of sustained breakout or reversal.
Furthermore, periods of high volume tell us people are interested in the stock, which means that more traders are trying to take positions. And this beehive of trading activity allows the stock to make bigger price moves.
As (day) traders, we look to capitalize on these significant moves. Focusing on range-bound stocks makes no financial sense due to their limited trading activity (i.e., low volumes).
Just like no two humans are alike, no two traders are alike in their strategy; that makes them unique. If you want to find your unique edge and the pattern that works for you, join us today!
Our team of experts will guide you on your journey so you can create a custom strategy built for you! Happy Trading!
Frequently Asked Questions
The most common pattern in day trading is the flag and pennant patterns. Bull flags and bull pennants for bullish patterns. Bear flags and bear pennants for bearish patterns.
Patterns are the most important indicator to use when day trading. They form important support and resistance levels,, giving traders the buy and sell signals they need to enter and exit trades.
The majority of day traders lose money because they need to learn technical analysis and proper risk management strategies. Top-day traders stick to a minimal-risk trading plan and trade their top two to three favorite patterns.
Best Patterns for Day Trading
- Bull flags
- Bear flags
- Hammer reversal
- Ascending triangle
- Falling wedge
- Rising wedge
- Bullish engulfing
- Bearish engulfing
- Bull pennant
- Bear pennant
Day trading patterns are real and traders use them every day to determine price targets. They do not guarantee price movement, however, they are valuable to determine risk management.
