Continuation Trading Patterns

When these continuation trading patterns are formed they confirm that the current gold trend is going to continue heading in same direction.

These patterns are used by traders to spot half-way points of the trend, this is because they form at the half way point of a market trend.

There are four types:

• Ascending triangle
• Descending triangle
• Bull flag/pennant
• Bear flag/pennant

Ascending Triangle

The ascending triangle is formed in an up gold trend and it shows that the upwards direction of the market is going to continue.

It shows that there is a resistance level that the buyers keep pushing each time moving it higher, and once it breaks xauusd price will continue heading upward.

Overhead resistance temporarily prevents the xauusd market from advancing higher, while the rising gold trend line beneath the pattern signals that buyers are still present. An upside penetration of the upper line is a technical buy signal for a market breaking out from an ascending triangle.

Found within a Gold upward gold trend, the ascending triangle forms as a consolidation period within the up gold trend and indicates upside continuation will follow.

The market formed an ascending triangle during its up gold trend which led to upside continuation. Buy point is when price clears the upper sloping line & the xauusd market continues heading upward.

Descending Triangle

The descending triangle is formed in a down gold trend & it shows that the downwards direction of xauusd trading price movement is going to continue.

It shows that there is a support level that the sellers keep pushing each time moving it lower, and once it breaks xauusd trading price will continue to move downward.

Support temporarily prevents the xauusd market from declining, while the descending sloping line above the pattern signals that the sellers are still present. A down-side penetration of the lower line is a technical sell signal for a market breaking out down from a descending triangle, & this indicates selling will follow.

Found within a XAUUSD downward gold trend, the descending triangle forms as a consolidation period within the down gold trend & indicates downside continuation will follow.

Market formed a descending triangle during its down gold trend which led to further selling and continuation of the downwards xauusd trend. The technical sell signal is when price breaks-out the lower horizontal sloping line as selling resumes to push the xauusd market lower.

Bull Flag/Pennant

This gold pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support & resistance for the xauusd trading price until the xauusd price breaks out. In general, the flag will not be formed perfectly flat but it will be sloping.

The bull flag is found within a Gold upward xauusd trend. In this continuation pattern where the xauusd market retraces slightly, it is therefore a slight retracement with narrow xauusd trading price action that has a slight downwards tilt. The technical buy point is when price penetrates the upper line of the flag. The flag portion has highs & lows which can be connected by small lines which are parallel, giving it what looks like a small channel.

The pennant occurs at halfway point of a bullish upward gold trend and after a break out a similar move equal to the height of the flagpole is expected.

The bull pennant above was just a resting period as the xauusd market gathered strength to break out and move higher. The continuation signal was confirmed as a upper line was broken to the up-side.

Bear Flag/Pennant

This flag is found in a Gold downward xauusd trend. The bear flag is a continuation pattern where the price retraces slightly with a narrow xauusd trading price action that has a slight upward tilt. The technical sell point is when price penetrates the lower line of the inverted flag. The pennant portion has highs and lows which can be connected by small lines which are parallel, giving it what looks like a small channel.

The bear pennant above was just a resting period for the xauusd market prior to more selling. The continuation signal was confirmed as the lower line was broken to the down-side.