What is Pattern (Technical Formation)?

In charting technical analysis (TA), a pattern is a measurement of an asset's price that acts in a distinctive manner. Technical patterns are as varied as traded assets themselves and make use of various support and resistance levels, trend lines, and technical formations such as flags, triangles, wedges, channels, and more. By studying and identifying patterns, traders use several data points to predict the potential price movements of an asset, with hopes of maximizing profitability. Patterns are also used to identify certain trends for technical indicators that make up a large part of technical analysis.