7 Continuation Patterns to Know in Stock Trading
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Continuation patterns are temporary changes in an existing stock trend that eventually return to continuing the original trend. The document discusses three types of continuation patterns traders should know: flags/pennants which are consolidations after sharp moves, symmetrical triangles with converging support and resistance lines, and channels defined by parallel support and resistance trend lines. Correct identification and understanding of these patterns can help traders anticipate when a existing trend in a stock will resume.
7 Continuation Patterns to Know in Stock Trading
- 1. 7 Continuation Patterns to Know AND INCREASE YOUR TRADING SUCCESS
- 2. What is a Continuation Pattern? A trend that shows a temporary change in behavior that will eventually go back to continue the existing trend. Typically these temporary changes are times of consolidation in which a stock moves mostly sideways instead of up or down.
- 3. How do I use them in trading? Identify them Understand what they mean
- 4. Which ones should I know? 3 basic types of continuation patterns Triangles Flags / Pennants Channels
- 5. Flag and Pennant Consolidation after a sharp move If the consolidation converges, it’s a pennant… otherwise it’s a flag
- 6. Symmetrical Triangle Converging support and resistance lines Stop Loss should be near the breakout point
- 7. Ascending / Descending Triangle Ascending Triangles have horizontal upper trend lines and rising lower trend lines Descending Triangles have horizontal lower trend lines and falling upper trend lines
- 8. Channel Support and Resistance Trend lines are parallel Typically a consolidation phase when a stock is range bound
- 9. Review Flags / Pennants Triangles Channels