Chart patterns are formations created by the price movements of an asset on a chart, used in technical analysis to predict future price behavior. Common patterns include head and shoulders, double tops and bottoms, triangles, and flags. Traders analyze these patterns to identify potential buy or sell signals, helping to inform their trading strategies based on historical price action and market psychology. Each pattern has its own implications for bullish or bearish trends, making them valuable tools for traders seeking to gain insights into market dynamics.