Forex Dance Patterns

CONTINUATION-REVERSAL PATTERNS


Jul.18.2013

Continuation reversal patterns indicate a pause in a trend. It’s as if the pair takes a rest for a while before it resumes dancing in the previous direction. It is also called consolidation. Many patterns that are known to indicate continuation often turn out to be reversal patterns, so they can be very tricky. That is why we have to be very careful before we put in an order based on a continuation pattern and refrain from jumping to conclusions too quickly.

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CONTINUATION REVERSAL PATTERNS LIST

The best-known continuation patterns are listed here.

  1. Triangles.
  2.  Rectangles.
  3.  Wedges.

Here is a cheat sheet of all continuation reversal patterns.

Continuation Reversal Patterns List Continuation Reversal Patterns List

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Triangles can be considered to be the celebrity of all continuation patterns because they appear a lot. But unfortunately, they are the least reliable (are you wondering why?). Still, we need to add them to our analysis tools but be cautious about them because they happen a lot.

 

Rectangles are the king of consolidation. As the markets move in all directions, circumstances try to confine it inside a box. It could be the indecisive superpower buyers and sellers as they take turns throwing punches and pushing the price up and down like a puppet. Or maybe the world’s political powers are just taking a rest on their economic decisions.

Wedges are very similar to triangles in that you can draw two converging lines from a series of peaks and valleys. The difference is that, a triangle has one rising and one falling line, but in a wedge, both lines are moving in the same direction; Both lines are either moving up, or moving down.

 

 

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