An Introduction to The Bearish and bullish Candlestick Continuation Patterns

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Candlestick continuation patterns – A simple explanation

Continuation patterns are simply groupings of candlesticks or bars on the chart that suggests that we are going to continue to go in the same direction. This is simply a continuation of the longer-term trend, and a confirmation that momentum is still building up. There are a multitude of patterns, but some of the most common ones are also some of the most powerful ones because so many traders are aware of them.

One of the easiest ones to spot is the actual breakout. In other words, we break out above a rectangle which is one of the most common consolidation patterns, it shows that we are going to continue to go higher. We also have flags and ascending or descending triangles, both of which show a buildup of momentum in one direction or the other. In other words, it simply shows that a lot of the momentum and the effort is put into going in one direction or the other.

Continuation isn’t guaranteed, but typically when you break out of a resistive barrier, it means that the buyers are continuing to pile into the marketplace. In other words, it’s likely that the resistance or support has given way and now the previous buyers or sellers are getting especially aggressive. They have simply broken through yet another barrier. While you cannot necessarily expect a 100% correlation to a continuation pattern and actual continuation, the odds simply work in your favor if you follow some very basic rules of continuation patterns themselves, and are patient enough to wait for a candle close above whatever resistance you are spotting on the chart, or support, if you are selling.