Continuation Chart Patterns Forex Trading
When these continuation chart patterns are formed they confirm that the current Forex trend is going to continue moving in the same direction.
Continuation patterns are used by Forex traders to identify halfway points of the Forex trend, this is because continuation chart patterns form at the halfway point of a Forex trend.
There are four types of continuation chart patterns:
- Ascending Triangle
- Descending Triangle
- Bull flag/pennant
- Bear flag/pennant
The ascending triangle is formed in an uptrend and it shows that the upward direction of the Forex trend is going to continue.
The ascending triangle chart pattern shows that there is a resistance level that the buyers keep pushing each time moving it higher, and once it breaks price will continue moving upward.
The overhead resistance temporarily prevents the Forex market from advancing higher, while the rising trend line beneath the pattern signals that buyers are still present. An upside penetration of the upper line is a technical buy signal for a market breaking out from an ascending triangle.
Found within a Forex uptrend, the ascending triangle chart pattern forms as a consolidation period within the uptrend and indicates upside continuation will follow.
The market formed an ascending triangle pattern during its uptrend which led to upside continuation. The buy point is when price clears the upper Forex trend line and the market continues moving upwards.
The descending triangle is formed in a Forex downtrend and it shows that the downward direction of price movement is going to continue.
The descending triangle shows that there is a support level that the sellers keep pushing each time moving it lower, and once it breaks price will continue moving downwards.
The support temporarily prevents the market from declining, while the descending trend line above the pattern signals that sellers are still present. A downside penetration of the lower line is a technical sell signal for a market breaking down from a descending triangle, and indicates selling will follow.
Found within a Forex downtrend, the descending triangle chart pattern forms as a consolidation period within the downtrend and indicates downside continuation will follow.
The market formed a descending triangle chart pattern during its downtrend which led to further selling and continuation of the downtrend. The technical sell signal is when price breaks the lower horizontal trend line as selling resumes to push the market lower.
Bull Flag Pattern
The flag pattern forms what looks like a rectangle. The rectangle is formed by two parallel trend lines that act as support and resistance for the price until the price breaks out. In general, the flag will not be perfectly flat but will have its trend lines sloping.
The bull flag is found within a Forex uptrend. This pattern is named for the resemblance of a flag on a pole. The bull flag is a continuation pattern where the price retraces slightly, it is therefore a slight retracement with narrow price action that has a slight downward tilt. The technical buy point is when price penetrates the upper trend line of the flag. The flag portion of the pattern has highs and lows which can be connected by small trend lines which are parallel, giving it the look of a small channel.
The flag occurs at halfway point of a bullish upward Forex trend and after a breakout a similar move equal to the height of the flagpole is expected.
Bull Flag Pattern
The market formed this pattern its uptrend. The bull flag was just a resting period as the market gathered strength to break out and trend higher. The pattern was confirmed as the upper trend line was broken to the upside.
Bear Flag Pattern
The bear flag is found in a Forex downtrend. The bear flag chart pattern resembles an inverted flag on a pole. The bear flag is a continuation chart pattern where the price retraces slightly bear flag is a slight retracement with narrow price action that has a slight upward tilt. The technical sell point is when price penetrates the lower trend line of the inverted flag. The flag portion of the pattern has highs and lows which can be connected by small trend lines which are parallel, giving it the look of a small channel.
Bear Flag Pattern
This market formed a this pattern during its downtrend. The bear flag was just a resting period for the market prior to more selling. The pattern was confirmed as the lower trend line was broken to the downside.
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