Forex - Forex Trading - Currency Trading

Chart Continuation Patterns

Written by Tom Hanok

Continuation patterns are chart patterns which set up the currency pair for a follow through move in the direction of the prior trend.

Continuation chart patterns include all of the patterns listed below:

1) Triangle Patterns

Ascending Triangle

The ascending triangle chart pattern shows two converging trendlines (support levels & resistance levels) and is a bullish formation that usually forms during a currency pair uptrend as a continuation pattern.

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Descending Triangle

This pattern is similar to the ascending triangle chart pattern but reverse, it shows two converging trendlines (support levels & resistance levels) and is a bearisch formation that usually forms during a currency pair downtrend as a continuation pattern (downtrend will continue).

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Symmetrical Triangle

This pattern shows two converging trendlines (support levels & resistance levels) and is (1) a bearisch formation that usually forms during a currency pair downtrend as a continuation pattern (downtrend will continue) or (2) a bullish formation that usually forms during a currency pair uptrend as a continuation pattern. (uptrend will continue).

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2) Flag and Pennant Patterns

Pennants and Flags are short-term continuation patterns and are among the most reliable of all continuation patterns, they are formed when there is a sharp price movement followed by a consolidation phase (sideways action), thereafter the previous up or down trend is expected to resume.

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3) Rectangle Pattern

A Rectangle or Box is a continuation pattern and describes a price pattern where supply and demand seems evenly balanced for an extended period of time. The currency pair moves in a tight range, finding support at the rectangle's bottom and hitting resistance at the rectangle's top.

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4) Wedge Patterns

Rising Wedge

Rising Wedge formations are bearish continuation patterns and look similar to triangle patterns (ascending triangle, descending triangle, and symmetrical) because of the converging trendlines( support and resistance) and narrowing price ranges(forms a cone).

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Falling Wedge

Falling Wedge formations are bullish continuation patterns and look similar to triangle patterns (ascending triangle, descending triangle, and symmetrical) because of the converging trendlines( support and resistance) and narrowing price ranges(forms a cone).

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