While the model forming the price moves in a narrow range. Also, do pay attention to the steepness of a channel: 

We broke out of a long consolidation, finally dictating where price could go. Moreover, the expected break is bullish too.

BREAKING DOWN 'Continuation Pattern' 

The trend continuation pattern is the price model indicating the tendency will continue after the current situation. While the model forming the price moves in a narrow range.

On the chart it looks like a small triangle on a long pole candle. The pennant also consists of a body and pole. A pole height indicates a target price after breakout of the pennant formation. That means that after breakout of formation the price will move the distance equal to the pole height.

The small pennant body also consists of 5 waves. The other continuation pattern is a triangle formation. It is a dying price movement during a pause on the market. On the chart it looks like a usual triangle. Depending on its direction to the tendency it can give a strong or weak continuation signal. A symmetrical triangle at any moment of trend is always the strong continuation formation.

But if an ascending triangle appears on the bearish trend and a descending triangle appears on the bullish trend they will be weak continuation signals that need the confirmation. In the forex market, bullish and bearish flags form more often than pennants. Both are important continuation patterns technical analysis offers. They have all the right to believe so.

In fact, most of the times, a falling wedge breaks higher. And, a rising wedge breaks lower. Moreover, they act as clear reversal patterns. They appear at the end of bearish, respectively bullish trend. However, in some cases, wedges are great trend continuation patterns. In fact, one of the most intriguing continuation patterns technical analysis offers comes from a wedge. The Elliott Waves Theory has a name for such a wedge. Check the chart above. A classic rising wedge forms.

Moreover, it breaks lower. It proves to be the wrong move. But, a continuation one. Japanese Trend Continuation Patterns The Japanese approach to technical analysis is slightly different. Mostly, it shows reversal patterns. However, one of the most powerful technical concepts from Japan is a continuation one. And, it can be either a reversal or a continuation pattern. In both cases, it shows a powerful move will come.

In a way, it is a breakout candle. Think of an ascending triangle, for example. The price pushes against resistance. And, it makes a series of higher lows. Eventually, the breakout comes. The same with the Bollinger Bands indicator.

Before a breakout, the bands contract. A doji shows similar conditions. Before a break, the range narrows. The candle becomes smaller, and smaller until it breaks.

A doji candle is one of the most powerful continuation patterns candlesticks can offer. It is quite strange if you think of the fact that one candle has such an influence on trend continuation patterns. The chart above shows three places where doji candles appeared. In all instances, the price broke higher.

A doji candle also shows uncertainty. It may end up being a reversal pattern. As such, traders place a pending to buy a break. In this case, a pending buy stop order above the doji candles. While a doji is one of the most powerful continuation patterns, the stop should be placed on the previous swing. Therefore, traders stay safe for wild swings destined to trip stops. Windows as Continuation Patterns A gap is a void between two candles. In the Forex market, a gap forms mostly over the weekend.

Or, when the market opens on Monday, it may gap. This is due to events over the weekend. Not every Monday sees a gap. But, it is not seldom that critical gaps appear.

After all, this is the biggest financial market in the world. As trend continuation patterns, the Japanese call gaps, windows. They show the strength of the previous trend. It should move in the same direction still. The Westerner looks at gaps differently. Mostly, they interpret them as being mandatory to be filled. Both approaches may be right. However, from this moment on, try looking at gaps as continuation patterns.

Conclusion Continuation patterns form everywhere. If it pauses, traders watch for trend continuation patterns to form. This article treated the most representative ones. The continuation patterns technical analysis traders use to find profitable trades. Used as part of a money management plan, they offer a fabulous return. If the time element is part of the equation, the results improve more.

Traders should embrace losses as part of the trading game. No one can win forever. At least, not in Forex trading. But, keeping them tight and under control, leads to bigger wins. Common continuation patterns include triangles , flags , pennants and rectangles.

Triangles Triangles are a common pattern and can simply be defined as a converging of the price range, with higher lows and lower highs. The converging price action creates a triangle formation. There are three basic types of triangles: For trading purposes, the three types of triangles can be traded similarly. As price continues to converge, it will eventually reach the apex of the triangle; the closer to the apex price gets, the tighter and tighter price action becomes, thus making a breakout more immanent.

A Short Study in Continuation Patterns. An ascending triangle can be defined as a horizontal upper bound and upward sloping lower bound. A descending triangle can be defined as a downward sloping upper bound and horizontal lower bound. Com Flags Flags are a pause in the trend, where the price becomes confined in a small price range between parallel lines.

This pause in the middle of a trend gives the pattern a flag-like appearance. Flags are generally short in duration, lasting several bars, and do not contain price swings back and forth as a trading range or trend channel would.

Flags may be parallel or upward or downward sloping, as shown in Figure 4. Com Pennants Pennants are similar to a triangle, yet smaller; pennants are generally created by only several bars. While not a hard and fast rule, if a pennant contains more than 20 price bars, it can be considered a triangle.

 

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A pullback is not just a pullback. There are different kinds of pullbacks. They can all be classified into channels – expanding, condensing, symmetrical, their angle either against the trend .

Trend Continuation Patterns are graphical formations that indicate a temporary pauses of an existing trend. They are often formed in shorter time intervals. Trend continuation patterns that are used by traders in technical analysis. Find out what the most representative ones are and how to trade them. 

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A continuation pattern suggests that a trend in a security price series chart is expected to continue. Continuation patterns occur mid-trend and are a pause in the price action of varying durations. When these patterns occur, it can indicate that the trend is likely.

The trend continuation pattern is the price model indicating the tendency will continue after the current situation. While the model forming the price moves in a narrow range. There are many different elements of the analysis of financial assets at the trader’s disposal. This can be both summary information fundamental data and computer models for predicting the.

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