What continuation patterns are

Continuation patterns are shapes suggesting a trend is pausing and likely to continue in the same direction. They usually appear mid-trend, as a rest while price consolidates before continuing.

Common patterns

  • Flag: a small, slightly slanted sideways zone after a strong run, suggesting price is resting before continuing.
  • Pennant: like a flag but the rest zone contracts into a small triangle.
  • Triangle: price oscillates in a narrowing range — symmetrical, ascending, or descending — suggesting consolidation before a break.
  • Wedge: price moves within two trendlines slanting the same way, showing a directional contraction.
  • Rectangle: price moves sideways between two parallel bounds, showing horizontal consolidation.

How to read and apply it

Continuation patterns are judged within an existing trend: they suggest a likely continuation after price breaks out of the consolidation zone. Like all patterns, this is a probabilistic hint; price can break the other way, so still manage risk and don't assume the break direction.

Common mistakes

  • Assuming price will always break in the old trend direction, ignoring a reverse break.
  • Mistaking any sideways zone for a meaningful continuation pattern.
  • Entering before price actually breaks the consolidation, risking false signals.

FAQ

  • Do continuation patterns guarantee continuation? No. They suggest a higher chance of continuation in trend context, but price can still break the other way.
  • Is a triangle always a continuation pattern? Not necessarily; a triangle can lead to continuation or reversal depending on context, so wait for the break.

Checklist

  • ☐ Is this pattern within a clear trend?
  • ☐ Have I waited for price to actually break the consolidation?
  • ☐ Do I have a plan if price breaks against the trend?