What Does Continuation Pattern Mean? A technical analysis pattern that suggests a trend is exhibiting a temporary diversion in behavior and will eventually continue on its existing trend. The symmetrical triangle charts displayed below are both exhibiting a continuation pattern. Notice how the chart extends above (below) its existing pattern. Continuation patterns tend to be the most accurate when the trend has existed for around one to three months. The most common types of continuation patterns are triangles, flags and wedges.
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Patterns: Ascending Triangle
July 9, 2009 in General Information
What Does Ascending Triangle Mean? A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs. Traders enter into long positions when the price of the asset breaks above the top resistance. The chart below is an example of an ascending triangle: An ascending triangle is generally considered to be […]
Patterns: Descending Triangle
July 9, 2009 in General Information, Technical Analysis
What Does Descending Triangle Mean? A bearish chart pattern used in technical analysis that is created by drawing one trend line that connects a series of lower highs and a second trend line that has historically proven to be a strong level of support. Traders watch for a move below support, as it suggests that downward momentum is building. Once the breakdown occurs, traders enter into short positions and aggressively push the price of the asset lower. The chart below is an example of a descending triangle: This is a […]
Seeing Triangles?
May 28, 2009 in Analyze Market Conditions, General Information, Weekly Podcast
Triangles top the market, market conditions, FX program.