Figures of continuation of a trend
You appeared on the page of the second part of the step-by-step guide to Shapes patterns. Thanks to him, you will quickly start trading with good profite.
In different literature you can find a large number of figures who in one way or another describe the market and promise a fast and very profitable trade. In this article we will discuss the most profitable ones that will help you in your trade.
All shapes (graphics models or patterns) can be divided into two groups:
And trend continuation figures.
Today we will consider only the figures of continuation of the trend.
The figures of the continuation of the trend suggest that there has been a pause in the market, or at the moment the trend has developed too quickly and it is time to take a break to gain strength for further movement. Want to know more about trending figures?
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In this topic, we want to talk about the figures of the continuation of the Forex trend. Traders, noticed certain patterns after which there was either a reversal or a continuation of the trend. These laws were subsequently successfully applied on the currency exchange and significantly improved.
The figures of the continuation of the Forex trend remind us of mathematical forms, but have little in common with them. At the heart of the trade instrument under consideration are the psychological aspects about which we will tell today.
Forex differs from other exchanges trading in other goods, hence the figures of the continuation of the trend have their own features. Although regardless of the site, the combination of Japanese candles is based on similar psychological principles.
Let 's start with a rectangle. Note, this form appears quite often and is a strong signal, to hold a profitable position, close a loss-making, or open a new one, in the hope of subsequent movements. The rectangle, as a pattern of continuation trend proved itself on the positive side and is worked out in the vast majority of cases with a high probability.
The general norm for all models is, the rule of the senior timeframe. The higher the time interval, the more likely the scenario is to be implemented. This is due to the psychological characteristics of the behavior of the players involved in the trade.
To work out a rectangle, it is necessary to take a wait-and-see position, watch the market. Waiting for a strong driver to appear, we see the currency starting a confident move. If there is growth, then there are participants who consider the value of the asset attractive for purchase and expect to further strengthen the course. At this point, demand exceeds supply, and traders continue to buy the pair.
Figures of the continuation of the Forex market trend appear on the chart after the activity of the participants fades. Such moments happen constantly, they make up most of the stock exchange activity. If the cost has fallen to the local minimum and is not going to rise, it is a precursor to the formation of the pattern of continuation of the trend.
As a rule, the pronounced movement is characterized by the appearance of large Japanese candles, after which a number of small ones are formed. The ideal situation is that between the extremes marking the beginning and end of the pulse, when the Fibonacci lines are applied, the cost does not rise or fall above or below the 23.6 and 78.6 levels.
Depending on the time frame, it may take more than one dozen candles to develop the figure of Forex trend continuation rectangle. The price is clamped in a narrow range, and trading volumes do not allow the course to be taken out of the corridor. Just like you, many participants are watching the market. The longer the flash lasts, the more players understand that the opposite direction the pair will not go.
Such a period of time is suitable for buying an item in the direction of global movement. When sufficient interest in the financial asset is formed, it will go to new extremes. The pattern of continuing the trend informs us that at this stage there are no investors willing to enter against the price movement. On the contrary, most players are looking for the best opportunity to trade towards the trend line. At such a moment, attempts at decline in the bull market should be perceived as a favorable moment for concluding a purchase deal. For bears the situation is opposite, growth is considered for sales.
The longer the rest period lasts, without significant fluctuations, the stronger the course will change in the future. Forex Academy helps students wait for a successful moment, and warns against working against the trend. One of the most common mistakes is working against the market. Beginners perceive pause as a place of trend reversal. Study trend continuation figures and make no mistakes.
Having gained enough experience, you will be able to feel the mood of the exchange without additional indicators and advisers Forex. We will try to help, and save your time by talking about opportunities for successful trading based on graphical analysis.
By and large, all figures of Forex 's continuation trend are different variations of the same psychological feature of the financial institution. Although depending on the model, mental aspects may differ. Classical technical analysis along with a rectangle, identifies torch, pennant, wedge, flag to the continuing trend models. In our opinion, the last and most reliable pattern is a rectangle. All other trend continuation figures can be more likely to be considered forms of uncertainty.
The torch, pennant, flag and wedge are modifications to the Forex triangle. Realities suggest that the resolution of the triangle is equally probable in both directions. In making historical analysis, we can conclude that in the past such figures of continuation of Forex market trend as triangles, in most cases fulfilled the assigned function. Today, the interests of marketing makers force the implementation of models, contrary to the expected scenario.
I suggest you consider the triangles in more detail, but remember the danger they have. The appearance of a symmetric triangle on the graph suggests that uncertainty has arisen among traders. The pair bounce in turn from the upper and lower bound forming a pattern of continuing the trend. In the scenario described, the course is like a spring, compressing it accumulates force. When a triangle is resolved, all participants take a single position. Those who have opened in the opposite direction close Forex 's loss-making warrants and enter the trend, giving added impetus to the price movement. Do not forget that in modern conditions the reversal after the triangle, quite frequent phenomenon.
Even more often the reversal takes place after the figure of continuation of the trend Forex wedge or pennant. In order not to fall into the trap, when analyzing these patterns, we recommend to monitor the volumes. Growth on small volumes should make you worried. But the danger is best warned by the divergence displayed on Forex indicators.
Consider the situation, a pennant appears on top, we see a number of successive peaks, each above the previous one, as well as a number of downturns, each above the previous one, the lines of support and resistance narrowing. If at this point divergence is formed on the indicators, most likely the tendency of itself is exhausted and it is necessary to wait for a break of the lower support line, followed by significant correction. If diversions are not observed, you are likely to have witnessed on so much of a strong trend that even during correction steam continues to grow.
Formation of Forex Flag trend continuation figure informs about rollback after substantial growth. Here in the bull market we are seeing a number of successive peaks and downturns, each below the previous one. We expect there to be a break in the resistance line, so we 're putting up a delayed purchase order near the lower boundary of the corridor. Using Fibonacci lines will improve input quality. If the pair drops below the 50% correction, the script is canceled.
Having the concept of indicators is vital for any trader, but it is not necessary to use them to generate income. It is enough to know the main figures of the continuation of the Forex trend to conclude successful contracts. When you see them on the chart, you are likely to predict the behavior of the currency. But it 's not that clear.
Triangle, a classical school of technical analysis is recognized as a pattern of continuing trend. It all depends on how things go. The output of economic statistics, or unexpected comments by officials, can turn a triangle into a reversal model. In theory, any form must be recognized as a figure of uncertainty. If the course continues in the specified direction, it will be called a pattern of continuation of the trend. If deployed, it will be a turning pattern of Price Action. Behind the beautiful drawings, with romantic names, is the behavior of the subjects of trade, which determine the value of the asset.
Ability to see and use in practice figures of continuation of Forex trend mandatory qualities of any modern investor. Combined with indicators, support and resistance zones, Fibonacci levels and other useful tools, you will be able to read the established financial positioning and make the right trading decisions.
We do not claim that patterns will help open 100 successful deals in a row. Having found themselves in a difficult situation, when indicators do not give reliable information about the events, figures of continuation of the Forex market trend will help to maintain a profitable position and increase income from the deal.
The topic under consideration is not complex, but for the correct interpretation of the obtained data, it will take investment experience and hours of market surveillance. Forex Academy will try to reduce the time spent, and will provide information about the most current models of trend continuation.