Trade Gold Trading

Continuation Setups

When these continuation trading patterns are formed they confirm that the current trend is going to continue heading in same direction.

These patterns are used by traders to spot half-way points of the trend, this is because they form at the halfway point of a trend.

There are 4 types:

  • Ascending triangle
  • Descending triangle
  • Bull flag/pennant
  • Bear flag/pennant

Ascending Triangle

The ascending triangle is formed in an up trend & it shows that the upwards direction of the market is going to continue.

It illustrates that there is a resistance zone that the buyers keep pushing each time moving it higher, and once it breaks price will continue heading up-ward.

Overhead resistance temporarily stops the market from moving higher, while the rising trend line beneath the pattern setup signals that buyers are still present. An upside penetration of the upper line is a trading buy signal for a market breaking-out from an ascending triangle.

Found within a upwards trend, the ascending triangle forms as a consolidation period within the up trend and indicates upside continuation will follow.

Continuation Chart Patterns: Rising Triangle Trading Setup and Descending Triangle Pattern

The market formed an ascending triangle during its up trend which led to upside continuation. Buy point is when the price clears the upper sloping line & the market continues heading up-ward.

Descending Triangle

The descending triangle is formed in a down trend & it highlights that the downward direction of price movement is going to continue.

It illustrates that there is a support area that the sellers keep pushing each time moving it lower, and once it breaks price will continue to move downwards.

Support temporarily stops the market from declining, while the descending sloping line above the pattern setup signals that the sellers are still present. A down-side penetration of the lower line is a trading sell trading signal for a market breaking out down from a descending triangle, and this shows selling will follow.

Found within a downwards trend, the descending triangle pattern forms as a consolidation period within the down trend & shows downside continuation will follow.

Continuation Patterns: Rising Triangle Setup and Descending Triangle Pattern

Market formed a descending triangle during its down trend which led to further selling and continuation of the downward trend. The technical sell signal is when the price breaks-out lower horizontal sloping line as selling resumes to push the market lower.

Bull Flag/Pennant

This pattern setup forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support & resistance for the price til the price breaks out. In general, the flag will not be formed perfectly flat but it'll be sloping.

The bull flag is found within a upward trend. In this continuation pattern where the market retraces slightly, it is therefore a slight retracement with narrow price action that has a slight downwards tilt. The technical buy point is when price penetrates the upper line of the flag. The flag portion has highs & lows that can be linked by small lines which are parallel, giving it what looks like a small channel.

The pennant occurs at halfway point of a bullish upward trend & after a break-out a similar move equal to the height of the flag pole is expected.

Continuation Patterns: Rising Triangle Trading Setup & Descending Triangle Chart Pattern

The bull pennant above was just a resting period as the market gathered strength to break-out & move higher. The continuation signal was confirmed as a upper line was broken to the up-side.

Bear Flag/Pennant

This flag is found in a downward trend. The bear flag is a continuation pattern where the price retraces slightly with a narrow price action that has a slight upward tilt. The technical sell point is when price penetrates the lower line of the inverted flag. The pennant portion has highs and lows that can be linked by small lines that are parallel, giving it what looks like a small channel.

Bear Flag Continuation Chart Setup Trading

The bear pennant above was just a resting period for the market before more selling. The continuation signal was confirmed as the lower line was broken to the down-side.

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