A continuation pattern is a price pattern or a candlestick pattern that indicates that the price of an asset is going to keep moving in the same direction it had before the pattern. Thus, after a continuation pattern that followed an uptrend, traders will go long, expecting the price to rise again. Conversely, after a downtrend, the market will usually remain bearish. In this article we are going to define what continuation patterns are. We’ll also let you know about the most common continuation patterns and what they mean for cryptocurrency tradint.
What is a continuation pattern?
Continuation patterns are one of the most reliable and commonly used technical analysis tools in cryptocurrency trading. As the name suggests, continuation patterns occur when the price of an asset continues to move in the same direction after a period of consolidation or correction. Continuation patterns can take many different forms, but they all share one key characteristic: they indicate that the current trend is likely to continue. Continuation patterns are therefore an invaluable tool for traders who are looking to enter or exit a position.
What are the most common continuation patterns?
There are many different continuation patterns, but some of the most popular include flag and pennant patterns, wedges and rectangles. Continuation patterns can be found on all timeframes, from intraday to weekly charts. However, it is important to remember that no single pattern is guaranteed to produce a successful trade. Continuation patterns should always be used in conjunction with other technical indicators, such as support and resistance levels, to confirm the strength of the trend.