The 5 Best Chart Patterns For Traders

Think you need to master dozens of trading patterns to make millions in the stock market?

Think again…

Throughout my 15 years teaching thousands of traders (including 40+ millionaires), I’ve been trying to answer one simple question:

What’s the one skill above all that separates my millionaire students from the 90% of traders who lose money?

The answer? Knowing exactly which setups to watch for (and which ones to ignore completely).

While everyone else is chasing the latest complex strategy, flashy tool, or exotic seasonal pattern, my top students stick to 5 core setups that have proven themselves time and time again.

Trust me, conquering 5 chart patterns beats being mediocre at 30.

A jack of all trades is a master of none.

Still, 9 out of 10 traders never learn which patterns to focus on.

They waste years studying some hyper-specific strategy while ignoring the small handful of easily identifiable chart patterns that actually generate consistent, reliable returns.

Understanding these setups is like having a cheat sheet while the rest of the class takes the test straight-up.

These are the 5 best chart patterns for traders…

Setup #1: Multi-Day Breakouts

The key to nailing multi-day breakouts? Using past highs to identify the breakout level.

You’re looking for stocks that have hit a very specific price two, three, four, or five days ago.

Or two, three, four, five weeks ago.

Then, you want to see a breakout over that level.

Why does it matter?

Because millions of traders have technical screens looking for specific breakouts over key levels.

You want as many traders as possible looking at that one key level.

That way, two groups of buyers converge at that breakout point:

• Longs like to buy those breakouts. It shows the stock might be in for a bigger run.

• Short sellers stop out when the stock they’re betting against hits a new high. When a short seller covers, they’re buying back shares.

That rush usually creates a quick breakout, especially if it’s a lower-priced volatile play in a hot sector (like AI or crypto).

The stock can break out 10%, 30%, or even 100% within a few minutes or hours…

In an ideal world, you draw a simple line on your chart at the previous high, and if it breaks convincingly, the stock usually explodes higher.

Especially if there’s the right news catalyst, if it’s in a hot sector, or if we’re in a bull market (like we are right now).

Setup #2: Morning Spikers

Some of the best trades come first thing in the morning…

Lately, this includes premarket (starting at 4 a.m. ET).

I know it’s not fun to get up at 4 a.m. ET. (Congratulations to my European students. You live in the right time zone.)

But whether it’s 4 a.m., 7 a.m., or 9:30 a.m., these three times are when stocks can really spike:

⏰ 4 a.m. ET: When brokers like Interactive Brokers open.

⏰ 7 a.m. ET: When retail brokers like E*TRADE or TD Ameritrade open.

⏰ 9:30 a.m. ET: Normal market hours, when every broker opens.

I’m looking for stocks with news. Stocks with volume. Stocks that are already up 5%, 10%, 20%, even 50%.

A stock that’s green early gets traders interested. It hits watchlists.

A stock that’s up 10%, 20%, 30% can go up 50%, 100%, 200% with the right news catalyst.

I wouldn’t buy a stock without a news catalyst. There are dozens of morning spikers that only move because different chat rooms are buying them.

When the chat room buys, they go up. When they sell, the stock goes down very quickly.

Ideally, I like buying a stock on a 10% or 20% dip off the morning highs.

That way, if it breaks through the highs, it can spike very fast as the shorts cover and more traders buy the breakout.

Setup #3: Afternoon Breakouts

Let’s say there was a high set on a chart at 7 a.m., 9 a.m., or 12 p.m.

By afternoon or after hours, you’re looking for a breakout over that key level.

I actually like afternoon and after-hour setups, especially for beginners, because they’re not as fast as premarket spikers.

In the afternoon, you’re working with more information. You might not get the same excessive breakouts or runs that you would get early in the morning, but it’s safer.

And oftentimes, it’s easier for newbies (who aren’t used to the speed and volatility of morning spikers).

If the stock fails to break out, if it doesn’t explode up in the afternoon or after hours, you just cut it. Simple as that.

If you like slower-moving trades, focus on afternoon breakouts.

Setup #4: Morning Panics Dip-Buys

I love dip-buying morning panics (especially on multi-day runners).

Think about stocks that have been spiking for two, three, four, five, six days in a row. Sometimes people are riding them up.

Congratulations to those people with patience, but I’m not one of them.

I’m always looking for a good price, like a shopper on Black Friday. I’m looking for deals in the stock market.

When a stock’s been running for several days, there’s always an opportunity to get in on a dip. And sometimes, this happens very quickly, especially near the market open.

If a stock has gone from $1 to $6 over five days, and the stock drops in the morning (due to the market, some negative news, or just profit taking), it might drop from $6 to $5.

$5 is a round number. Newbies tend to use stop losses exactly at round numbers to protect themselves.

If all those stop losses at $5 get taken out in a hunt, that creates a tsunami of automated sell orders.

The stock might drop from $5 down to $4.50 or even $4 within a few seconds.

That opens the door to a solid dip-buying opportunity. The stock, for literally no reason (or a small reason), drops 20%, 30%, 40%.

If you’re prepared, you can flip it for a quick 5%, 10%, or 20% bounce.

There is a risk of “catching a falling knife.”

Sometimes, if the stock drops due to some truly bad news, the lows can continue going lower.

But if you know there’s no negative news, it’s probably just stop losses.

And you can scalp those for quick gains.

Setup #5: First Green Days (My Favorite For Beginners)

Always save the best for last.

Why is this pattern the best for newbies? It’s the slowest.

As a beginner, it’s overwhelming when setups move dozens of % in minutes.

The first green day pattern solves this common headache.

You’re simply buying a stock into the close on the first green day (after a series of red daily candles).

You want a stock that’s up 10%, 20%, 30%, 40% on the first green day … with a catalyst.

Don’t be afraid to buy high.

Look for big volume candles … those can really keep going.

The first green day leads to a second green day.

The first green day pattern is all about buying momentum, where there’s a little bit of price discovery.

Most people are not focused on small caps and micro caps. There’s a timing inefficiency, especially over the weekend.

My single best and most winning strategy of all? Buying a stock on the first green Friday and selling it on Monday.

Whether people are seeing the stock on the scans, researching it over the weekend, or just overnight … they’re buying because it just popped up on their radar.

That creates a huge opportunity in buying these stocks on day one of a bullish reversal.

Other traders find it on day two, day three, day four … and we reap the benefits.

The stocks that spike 50%, 100%, 200%, 500% usually don’t do it all in one day. It takes several days.

But once the stock has already closed strong on a first green day, you can ride the momentum into day two, day three, day four, and so forth.

Jack Kellogg, my top student of all time (now over $22 million in verified profits)?

This is his favorite pattern of all time.