Continuation Patterns Explained

If a pattern isn't a bearish pattern or a bullish pattern, then what is it?

Against that backdrop of a question you might expect it a pattern that maintains a trend - if it's not up or down then it must the same.

And that is why such patterns are called continuation patterns. Here are some example types of patterns.

Triangles: this pattern gives prices the chance to consolidate, and then they will tend to move in the same steady direction.

Boxes and rectangles - these are where a price oscillates between two approximate prices, enabling a box or rectangular shape to be drawn 'around' it leading to this name.

Flags - here the move generally may be a little up or down in terms of which way the flag 'points'.

Diamonds - if there is a large swing one way then you will often see some sort of readjustment and this is called a diamond, as that sort of shape can be drawn around it, with the trend then continuing.

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