Continuation Patterns

Continuation Patterns are technical chart patterns that signal a temporary pause or consolidation in the market before the price continues in the same direction as the existing trend.

The trend takes a break — then continues.

Why Continuation Patterns Matter

Traders use them to:

• Identify trend-following entry points
• Add positions during pullbacks or consolidation
• Set clear breakout levels
• Manage risk more effectively

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Common Types of Continuation Patterns

1️⃣ Flags

• Short-term consolidation after a strong move
• Slopes against the main trend
• Indicates strong momentum continuation

📌 Bull Flag / Bear Flag

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2️⃣ Pennants

• Small symmetrical triangle after a sharp move
• Decreasing volume during consolidation
• Breakout usually follows the prior trend

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3️⃣ Triangles

• Ascending Triangle → bullish continuation
• Descending Triangle → bearish continuation
• Symmetrical Triangle → continuation or breakout (needs confirmation)

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4️⃣ Rectangles (Trading Range)

• Price moves between horizontal support and resistance
• Breakout direction usually follows the previous trend

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5️⃣ Wedges (in some cases)

Falling wedge → bullish continuation
(context is very important)

Rising wedge → bearish continuation

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Key Characteristics

✔ Occur mid-trend
✔ Volume often declines during consolidation
✔ Breakout volume typically expands
✔ Best used with trend confirmation tools

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Continuation vs Reversal Patterns

Best Confirmation Tools

• Trendlines
• Support & Resistance
• Volume
• Moving Averages
• Fibonacci levels

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Key Takeaway

Continuation patterns help traders stay with the trend rather than fight it.
They work best when aligned with strong trend structure and volume confirmation.