What is a Continuation?

A continuation pattern is when a trend continues in the same direction after ranging price action or a consolidation phase. The overall longer term trend needs to be assessed for traders to enter into a continuation trade. Ideally, the long term trend will continue to build in strength after completion of a continuation pattern.

3 Price Continuation Behaviours

• Trade in the price breakout direction.

• When the price breaks the resistance level long/short, the trend continues.

• Failure of the trade indicates a trend reversal.

Continuation Candlestick Chart Patterns

There are many different candlestick chart patterns that can be observed when price is ranging before a breakout.

• Head & Shoulders

• Ascending/Descending Triangle

• Harmonic Patterns (bats, bears, sharks, butterflies etc)

• Flags & Pennants

• Double Tops or Bottoms

Four Stages That Define A Pattern Set Up

The original trend direction is interupted by a new set up pattern. A breakout then occurs and the original trend is resumed.

• Original trend direction

• A new pattern is set up

• A breakout occurs

• The trend continues or a price reversal is made.

COMPARE TRADING ACCOUNTS