What are continuation chart patterns?

Continuation chart patterns indicate that the market trend will be continued once the pattern is finished. These are also called consolidation patterns because they determine how traders take a quick break before moving further in the same path as the previous trend. Continuation patterns can be bullish as well as bearish.

What is a consolidation pattern?

Consolidation appears in the form of sideways price movement. The pattern completes itself upon a strong breakout of the consolidation zone, resulting in the continuation of the preceding trend. Continuation patterns usually play out over the short to intermediate term.

What are the different types of chart patterns?

There are two main types of chart patterns that you are likely to know: Reversal, continuation pattern. What are Reversal patterns? It’s not complicated to figure out the reversal pattern. It indicates that a market trend will reverse once the pattern is finished.

Are continuation patterns reliable?

While continuation patterns can help traders make trading decisions, the patterns are not always reliable. Potential problems include a reversal in a trend instead of a continuation and multiple false breakouts once the pattern is beginning to be established.