Trading Reversal Patterns & Continuation Patterns - Reversal vs Continuation Patterns

Forex Patterns - Analysis Setups Strategies

Forex chart patterns are graphical illustrations of repeating price action patterns that are commonly used in the market to analyze price movement.

Forex Setups is one of the studies used in technical analysis to help traders learn how to recognize these repeating Setups formations.

These Setups are important in trade because when the market isn't moving in a particular direction it's forming a chart pattern. It is important to know these Setups formations so as to have an idea of what might be the next likely move in the market.

When price movements are plotted there are several Setups formations and setups which occur naturally & repeat themselves over and over again. These Setups formations are used by a lot of technical traders to predict the next price move.

Forex traders often study these Setups formations to measure supply & demand forces which form the basis for price fluctuations.

These Setups are classified into Three different categories:

1. Reversal Patterns

• Double tops Setups

• Double bottom Setups

• Head and Shoulders Patterns

• Reverse head & shoulders Setups

2. Continuation Setups

• Rising triangle Setups

• Falling triangle Setups

• Bull flag/pennant Setups

• Bear flag/pennant Setups

3. Bilateral

• Symmetric triangle - Consolidation Setup Patterns

• Rectangle - Range Setups

Reversal Patterns - Reversal Patterns - confirm the reversal of the trend once this reversal chart setup is confirmed. These Reversal Patterns are formed after extended market trend either upwards or downward & these reversal patterns signal that the market is ready to reverse.

Continuation patterns Setups - are formations which set-up the market for a market trend continuation move in the direction of the previous trend. These Continuation Setups are formed when the market is taking a pause before continuing in same direction of previous trend.

Consolidation patterns Setups - form when the market is taking a pause/break before deciding the next market trend direction to take. When these Consolidation Setups are formed - the market is trying to decide which direction to trade.

Technical Chart Analysis of Setups

There are 2 types of chart analysis in trading, these 2 may seem similar but aren't: the 2 are:

• Japanese Candlesticks - Study of a single candle - Read Japanese Candlesticks Patterns

• Forex Patterns - Study of a series of candlesticks formations

(This learn tutorial is about the second option above - Setups)

The different guides for these 2 types analysis are:

Japanese Forex Candles

• 39. Marubozu Candle-stick Pattern & Doji Candle Pattern

• 40. Spinning Top Candle Patterns

• 41. Reversal Candlesticks Patterns

• 42. Inverted Hammer Candlestick Pattern & Shooting Star Candlestick Pattern Candles Patterns

• 43. Piercing Line Candle Pattern & Dark Cloud Candlestick Pattern Candles Patterns

• 44. Morning Star Candles & Evening Star Candles Patterns

Forex Setups Tutorials

• 53. Double Top and Double Bottom Patterns

• 54. Continuation Setup Patterns

• 55. Consolidation Patterns

• 56. Head and Shoulders Chart Setups & Inverse Head and Shoulders Setups

The exemplifications displayed below also display the difference of the arrangements of these 2 technical analysis methods.

Candles Patterns - Study of a single candlestick

FX Setups - Study of a series of candle s

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