Triangles
Continuation Patterns are patterns that exist within a trend at prices where the market consolidates before moving on in the direction of the original trend. There are several main consolidation patterns, all of which follow the same simple rules.
– The price will move decisively in one direction before running into support/resistance
– The price will consolidate for a time and create the continuation pattern
– The price will break through the support/resistance and signal a continuation of the previous trend.
There are several continuation patterns and the articles would start from the Triangles.
Triangles
Triangles can best be defined as converging trendlines. Based on this fact alone, traders can draw two immediate conclusions regarding triangles:
1. As they converge, volatility contracts; this suggests a breakout is on the horizon.
2. Once one of the triangle’s trend lines is broken, traders can expect the market to breakout in that direction.
Triangles can be divided into three main types: ascending, descending and symmetrical.
Descending Triangles
The...
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