Best Chart Patterns for Continuation Trading
Continuation patterns allow traders to enter an existing trend after a brief pause. This is often called 'buying the dip' or 'selling the rally.' Continuation trading has higher win rates than reversal trading because it goes with the prevailing momentum.
Top Recommended Patterns
Brief downward-sloping consolidation in an uptrend before continuation.
Three small pullback candles within a strong uptrend before the next leg up.
Rising lows approaching flat resistance signal impending breakout continuation.
Rounded bottom followed by a handle pullback before resuming the uptrend.
A gap-up continuation pattern where the pullback into the gap does not fill it.
Strong first candle, small pullback candles, then a powerful continuation candle.
Frequently Asked Questions
What is a continuation pattern?▾
A continuation pattern is a price formation that signals the existing trend will resume after a brief pause or consolidation. Examples include flags, pennants, and triangles.
Are continuation patterns more reliable than reversal patterns?▾
Generally yes, because they align with the existing trend. Continuation patterns have higher win rates since momentum tends to persist more often than it reverses.
How do you trade a continuation pattern?▾
Enter on the breakout from the consolidation, set your stop loss below the consolidation low (for bullish), and target a measured move based on the prior leg.
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