Continuation Pattern
A continuation pattern is a technical analysis term used to describe a situation in which the price of a security continues in the same direction as it was previously moving. This pattern is often used by traders to identify potential entry and exit points in the market. The pattern is based on the idea that the price of a security will continue to move in the same direction until a certain point is reached. This point is known as a resistance or support level, and it is the point at which the price of the security is expected to reverse direction.
History of the Term
The concept of a continuation pattern has been around for centuries. It was first used by traders in the 1700s to identify potential entry and exit points in the market. The term was popularized in the late 1800s by Charles Dow, who used it to describe the behavior of stock prices. Since then, the concept has been used by traders and investors to identify potential trading opportunities.
Comparison Table
| Pattern | Description |
|---|---|
| Continuation Pattern | Price continues in the same direction as it was previously moving. |
| Reversal Pattern | Price reverses direction from the previous trend. |
Summary
A continuation pattern is a technical analysis term used to describe a situation in which the price of a security continues in the same direction as it was previously moving. This pattern is often used by traders to identify potential entry and exit points in the market. For more information on continuation patterns, traders can visit websites such as Investopedia, TradingView, and StockCharts.
See Also
- Reversal Pattern
- Trend Line
- Support Level
- Resistance Level
- Moving Average
- Relative Strength Index (RSI)
- Bollinger Bands
- Price Action
- Volume
- Technical Analysis
