Continuous Forex Chart Pattern
Technical analysis is sometimes also called the art of analyzing graphs, studying both stock price charts and forex pairs and detecting recurring price patterns that often appear on the chart. The ability of traders to detect repetition of this chart pattern is one of the key elements for technical analysis. Graph patterns can appear in any price graph and on timeframe sharing. Usually chart patterns can provide clear entry and exit signals, as well as projected prices, stop levels and target levels. Studying the price pattern in the graph can be categorized into two categories namely, continuous (continuous) and reversal patterns.
The continuous pattern is the pattern that gives a trend of price movement to continue the previous trend. Meanwhile, the pattern of reversal is a pattern that gives a trend of price movement against the direction of the previous trend. Well, this article will discuss the pattern of continuous graph.
A continuous pattern is formed when the price enters the consolidation or correction phase during the trend and indicates that a continuation of the previous trend is highly likely. The present trend is a prerequisite for continuous patterns because there must be some tendency that will indicate the sustainability of the trend after the pattern is completed. If there is no previous trend, then the pattern is not a valid continuous pattern.
In identifying price patterns, you can use tools such as trend lines, horizontal, triangular shapes, ellipse (circle) shapes and other tools. And usually also sticking price pattern or be around support and resistance which valid or significant.
Here are the most popular and often invisible and valid price patterns that include Cup and Handle patterns, flags and pennants, symmetric triangle, ascending triangle and descending triangle and square length (rectangle).
The benefit of price pattern identification is being able to see the appropriate price and target tendencies, once the price pattern successfully completes the pattern form. Of course, at the end of the pattern you should see the trend of price movement breaking or waiting for the correction. So you can get entry level, stop and optimal target.