Continuation Patterns
Continuation patterns are a type of technical analysis used to identify the potential for a trend to continue in the same direction. They are used to identify potential entry and exit points for a trade. Continuation patterns are formed when the price of a security moves in one direction, pauses, and then continues in the same direction. These patterns are used to identify potential reversals in the trend and can be used to identify potential entry and exit points for a trade.
History of Continuation Patterns
The concept of continuation patterns was first developed by Charles Dow, the founder of Dow Theory. Dow Theory is a form of technical analysis that is based on the idea that the market discounts all known information. Dow Theory states that the market moves in three distinct phases: accumulation, distribution, and mark-up. Continuation patterns are used to identify potential reversals in the trend and can be used to identify potential entry and exit points for a trade.
Comparison Table
| Pattern | Description |
|---|---|
| Flag | A flag is a continuation pattern that is formed when the price of a security moves in one direction, pauses, and then continues in the same direction. |
| Pennant | A pennant is a continuation pattern that is formed when the price of a security moves in one direction, pauses, and then continues in the same direction. |
| Triangle | A triangle is a continuation pattern that is formed when the price of a security moves in one direction, pauses, and then continues in the same direction. |
Summary
Continuation patterns are a type of technical analysis used to identify the potential for a trend to continue in the same direction. They are used to identify potential entry and exit points for a trade. Continuation patterns are formed when the price of a security moves in one direction, pauses, and then continues in the same direction. These patterns are used to identify potential reversals in the trend and can be used to identify potential entry and exit points for a trade. For more information on continuation patterns, you can visit Investopedia, The Balance, and Investing.com.
See Also
- Technical Analysis
- Trend Lines
- Support and Resistance
- Price Action
- Chart Patterns
- Moving Averages
- Indicators
- Oscillators
- Volume
- Fibonacci Retracements
