How Do I Trade Continuation Chart Pattern? - Analysis of Continuation Patterns
Continuation Setup Patterns
When these continuation patterns are formed on charts they confirm that the prevailing Forex trend is going to continue moving in same direction.
These continuation patterns are used by traders to identify half way points of the trend, this is because they form at the half way point of a market trend.
There are four types of continuation chart patterns:
- Rising triangle continuation chart pattern
- Falling triangle continuation chart pattern
- Bull flag/pennant continuation chart pattern
- Bear flag/pennant continuation chart pattern
Rising Triangle Continuation Pattern
The ascending triangle pattern is formed in an upward trend & it shows that the upward market move direction of market is going to continue.
Rising triangle pattern highlights that there's a resistance area that the buyers keep pushing each time moving it higher, and once it breaks-out price will continue moving in an upwards trend.
Overhead resistance temporarily prevents the market from advancing higher, while the ascending trendline beneath the ascending triangle chart pattern signals that buyers are still present. An upside penetration of the upper line of the ascending triangle pattern is a technical buy signal for a market breaking out from an ascending triangle pattern.
Found within a upwards trend, the ascending triangle pattern forms as a consolidation period within the uptrend and indicates upside continuation will follow.
How Do I Trade Rising Triangle Pattern - Rising Triangle Continuation Pattern
The market formed an ascending triangle pattern during its up-wards market trend which led to the up-side continuation.
The buy signal point is when price clears the upper sloping line of the ascending triangle chart pattern & market continues moving upward.
Falling Triangle Continuation Pattern
The descending triangle pattern is formed in a downwards trend & it displays that the down-wards direction of price movement is going to continue.
Falling triangle pattern highlights that there's a support area 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 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, & this demonstrates selling will follow.
Found within a downwards trend, the descending triangle pattern forms as a consolidation period within the downward trend & demonstrates downside continuation will follow.
How Do I Trade Falling Triangle Chart Pattern - Falling Triangle Continuation Pattern
Market formed a descending triangle pattern during its downward trend which led to further selling and continuation of the downward 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 Pattern
Bull flag 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 won't be formed perfectly flat but this pattern will be formed slanting.
The bull flag pattern setup is found within a upwards trend. In this continuation pattern where the market retraces slightly, it's hence a slight retracement with narrow price action which has a slight downwards tilt.
The technical buy signal is when the 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 market trend & after a trading break out a similar move equal to the height of the flagpole is then expected.
How Do You Trade Bull Flag Pattern - Bull Flag Continuation Pattern
The Bull flag chart pattern above was just a resting period as the market gathered strength to break out & move higher.
The Bull flag pattern setup continuation signal was completed as the upper line of the Bull flag chart pattern was broken to the upside.
Bear Flag Continuation Pattern
Bear flag pattern setup flag is found in a down-wards trend.
The Bear flag pattern is a continuation chart pattern where the price retraces slightly with a narrow price action which has a slight upwards tilt.
The technical sell signal is when the 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 Do I Trade Bear Flag Pattern - Bear Flag Continuation Pattern
The Bear flag chart pattern above was just a resting period for 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.
