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Thread: What is the price continuation pattern and why is it repeating?

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    Default What is the price continuation pattern and why is it repeating?

    What is the price continuation pattern and why is it repeating?

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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    CONTINUATION PRICE PATTERN

    A continuation price pattern is a type of model that is formed after a re-examination of the market on a market chart. In some cases, continuation patterns occur after the market has been allowed to consolidate for a certain period of time. When the market is trending, the advanced model assumes some kind of market movement that continues the previous market trend after a consolidation phase.

    The continuation pattern formed on the market chart can be bullish or bearish depending on the previous market trend. If a particular market trend is strong, the market tends to consolidate for some time. With a proper understanding of candlestick chart formations, candles forming at the key level of the chart indicate whether the market will continue this trend. The consolidation phase is always a good time to start a trend.

    Continuation price patterns refer to chart patterns that usually appear in the middle of an uptrend or downtrend in the form of a temporary consolidation period (side trend) before the price trend continues in the same direction as the original trend. And there are two types of price expansion models:

    1-Bullish continuation price patterns :

    Name: bullish continuation patterns.jpg Views: 16 Size: 41.9 KB

    2-Bearish continuation price patterns :

    Name: bearish continuation patterns.jpg Views: 16 Size: 42.5 KB

    What are types of bullish and bearish continuation pattern :

    There are four types of ascending expansion patterns:

    Ascending triangle : A continuation pattern in the middle or during an uptrend occurs when the price moves between the upper resistance line and the lower uptrend line and the price continues moving between these two levels until the distance between them becomes very narrow. then the price usually breaks the upper resistance line to continue the upward movement in the direction of the initial uptrend.

    See also: Invest in the most successful traders. More details.


    Bullish pennant pattern : The continuation pattern looks like a small triangle where the price moves between the downtrend's top line and the uptrend's bottom line until the price breaks the downtrend's upper line to continue moving up in the same direction as the initial direction. an uptrend.

    Bullish flag pattern :is a continuous flag-like pattern that is formed during an uptrend when the price is rising and then for a short period of time during a consolidation period it moves between two predefined levels, forming a pattern that looks like a flag, as you can see in the image below. this. And when the price rises and comes out of a tight consolidation, it usually continues to move up towards the initial uptrend.

    Bullish Rectangle Pattern: is a continuation pattern resembling a rectangle that usually forms during an uptrend, when the price moves up and down between the resistance and support levels, then rises higher to break the upper resistance level and your upward movement in the Direction to continue the original uptrend.

    There are four types of sequel bear patterns:
    Descending triangle.
    Bearish pennant pattern.
    Bearish flag pattern.
    Bearish rectangle pattern.

    And they are the opposite of a bullish continuation pattern and you can see that in the image below. They all usually end up closing prices below this model to continue their downward movement towards the initial downtrend.

    Why do continuation patterns repeat ?

    Continuation patterns repeat as the market usually takes a break in the middle or during a trend by moving the price sideways. This period is known as the consolidation period. And during this period all investors are waiting to see if the market continues to move in the direction of its original trend or not. Therefore, during a period of consolidation, a continuation pattern usually occurs when the price moves within a narrow range until the price closes outside the model.

    The main reason why forex continuation patterns are important

    Patterns are important because they keep popping up, and the only thing you need to keep in mind is that "history repeats itself" or in other words, "there's nothing new under the sun." People are comfortable with what they know, and these patterns have been around for centuries. Since ancient times, people have always done things in a repeating pattern, so you can be sure that studying will benefit you in the long run because even if you look at the graph (price is expressed in a graphic scale), it is interesting it is still human. (or human logic encoded and executed by a trading algorithm). One major caveat, however, is that you shouldn't expect a perfect textbook mock-up to appear on your screen. The market is dynamic, so there will always be some deviations from the original image. So leave room for market creativity so you can take advantage of this chart shape.

    Though trading on financial markets involves high risk, it can still generate extra income in case you apply the right approach. By choosing a reliable broker such as InstaForex you get access to the international financial markets and open your way towards financial independence. You can sign up here.


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