Chart patterns are formations created by the price movements of a financial asset over time, often displayed on a stock chart. These patterns help traders and investors identify potential future price movements based on historical trends. Common chart patterns include head and shoulders, triangles, and double tops, each suggesting different market conditions and potential reversals or continuations. Traders use these patterns to make informed decisions about buying or selling assets. By recognizing these formations, they can anticipate market behavior and manage risks more effectively. Understanding chart patterns is a fundamental aspect of technical analysis in the world of finance.