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