Continuation patterns are temporary changes in an existing stock trend that eventually return to continuing the original trend. The document discusses three types of continuation patterns traders should know: flags/pennants which are consolidations after sharp moves, symmetrical triangles with converging support and resistance lines, and channels defined by parallel support and resistance trend lines. Correct identification and understanding of these patterns can help traders anticipate when a existing trend in a stock will resume.

1. 7 Continuation Patterns to
Know
AND INCREASE YOUR TRADING SUCCESS

2. What is a Continuation Pattern?
 A trend that shows a temporary change in behavior that will eventually go
back to continue the existing trend.
 Typically these temporary changes are times of consolidation in which a stock
moves mostly sideways instead of up or down.

3. How do I use them in trading?
 Identify them
 Understand what they mean

4. Which ones should I know?
 3 basic types of continuation patterns
 Triangles
 Flags / Pennants
 Channels

5. Flag and Pennant
 Consolidation after a sharp move
 If the consolidation converges, it’s a pennant… otherwise it’s a flag

6. Symmetrical Triangle
 Converging support and resistance lines
 Stop Loss should be near the breakout point

7. Ascending / Descending Triangle
 Ascending Triangles have horizontal upper trend lines and rising lower trend
lines
 Descending Triangles have horizontal lower trend lines and falling upper
trend lines

8. Channel
 Support and Resistance Trend lines are parallel
 Typically a consolidation phase when a stock is range bound

9. Review
 Flags / Pennants
 Triangles
 Channels

10. Swing Trader
& Technical
AnalystLet’s
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Mike
Auten