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Continuation patterns suggest ongoing trends from "summary" of Japanese Candlestick Charting Techniques by Steve Nison
Continuation patterns are significant because they signal that the existing trend is likely to continue. These patterns indicate a temporary pause in the current trend before it resumes in the same direction. Traders who can identify continuation patterns have the advantage of being able to anticipate where the market is likely headed next. By recognizing these patterns, traders can position themselves accordingly to profit from the ongoing trend. One common continuation pattern is the flag pattern. This pattern consists of a sharp price movement followed by a consolidation period, forming a flag-like shape on the chart. The flag pattern suggests that after the brief consolidation, the price is likely to continue moving in the same direction as the initial sharp movement. Traders who spot a flag pattern can use it as a signal to enter a trade in the direction of the trend. Another continuati...
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