Definition
A pipe pattern is a brief, abrupt reversal made of two adjacent price bars that each carry an unusually long spike in the same direction. On a weekly chart, two side-by-side bars with long parallel downward spikes form a pipe bottom; two with long upward spikes form a pipe top. The name comes from their resemblance to a pair of vertical pipes standing next to each other.
The pattern is one of the fastest reversals in the chart-pattern catalogue. Where a head-and-shoulders takes weeks to develop, a pipe resolves the question of who controls the trend in just two bars.
Why it matters
How it works
The long spikes are the heart of the pattern: they show price reaching toward an extreme and being driven back within the same bar. Two such bars in a row signal that the move's momentum has met decisive opposition. The pattern is generally considered confirmed when price closes beyond the high of the two bars for a pipe bottom, or below their low for a pipe top.
Because the formation is so compact, it offers an early entry but with weaker confirmation than longer patterns — speed is traded for certainty.