The 5 Chart Patterns Every Trader Needs (Free Guide)

Key takeaways

Fair value gaps show forceful, directional moves
Engulfing candles show one side taking complete control
Swing failures trap the chasers and fuel the reversal
Break and retest confirms a level has flipped
Rejection wicks mark defended levels

Five patterns, every day

These five show up on every market, every day. Spot them and you read the chart better than most people trading it. Each image below is taken straight from the video.

1. Fair value gaps

Three candles where the fast middle candle leaves a gap between the first and third wicks, ringed in red — The middle candle moves so fast the wicks either side never touch.

When a candle moves with real force it leaves a gap between the neighbouring wicks. That is strong directional movement, and the zone it leaves behind often gets revisited before the move continues.

2. Engulfing candles

A large green candle whose body completely swallows the previous candle, outlined with a box labelled swallowed whole — One body swallows the previous one whole. One side just took over.

When one candle's body completely swallows the one before it, control has changed hands in a single candle. At a level you care about, it is one of the cleanest confirmation triggers there is.

3. Swing failures

Price taking out a marked high and immediately reversing downward, labelled takes it out and then reverses — The high gets taken out, then price reverses immediately. The chasers are the fuel.

Price takes out an obvious high or low and instantly reverses. Everyone who chased the break is now trapped, and their exits power the move the other way. That is momentum you can measure.

4. Break and retest

Price breaking a level, pulling back to test it and continuing, with the level marked as flipped — Break, come back, test, continue. The level has flipped sides.

Price breaks a level, pulls back to test it from the other side, and carries on. The successful retest is the confirmation that the level flipped, from resistance to support or the reverse.

5. Rejection wicks

A candle with a long upper wick at a key level, marked as rejected, followed by a reversal — Price pushed through the level and got slammed back inside one candle.

A long wick at a key level means price tried to push through and got rejected hard within a single candle. It is the market telling you the level is defended, and a potential reversal signal when it appears at extremes.

Put them together

None of these is a trade on its own. The opening range strategy shows how gaps, retests and engulfing candles combine into one complete setup. Practise spotting all five on the free entry trainer, and if you are starting from zero, the free beginner course builds up to these patterns lesson by lesson.

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Frequently asked questions

Are chart patterns reliable?

No pattern wins on its own. Each of these five describes a piece of market behaviour, who is in control and where the pressure is, and they earn their keep when combined with levels, structure and defined risk. Treat them as evidence, not signals.

What is the most important pattern for beginners?

The fair value gap, because it separates forceful moves from noise, and most beginner losses come from treating noise as signal. Learn it first, then the break and retest, which turns levels into trades.

What does an engulfing candle mean?

One candle's body completely swallows the body of the candle before it. It means one side took complete control in a single candle, which is why it works as a confirmation trigger at levels rather than as a standalone entry.

What is a swing failure?

Price takes out an obvious high or low, finds nothing there, and immediately reverses. The failed break traps the traders who chased it, and their exits fuel the move in the opposite direction.

What do long rejection wicks mean?

Price tried to push through a level and got slammed back within the same candle. A long wick at a key level is evidence the level is defended, and a warning against trading into it.

Written by Tony: AA Global FX
Tony runs a live trading desk on Deriv synthetic indices and index CFDs and has published 116+ free trading tutorials on YouTube since 2022. About · YouTube
Last updated: 2026-07-17

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