Technical analysis is a method that makes use of charts that represent the trends that exist currently in the market. These charts that are helpful in representing the trends in market are called as continuation patterns as these charts do not have breaks or gaps. These charts usually comprises of short periods of consolidation. The breakouts occur usually in the same direction of the trend that exists in the market. The major patterns that are under this category are flags, pennants, triangles, wedges and rectangles. Each of these patterns have greater influence over Forex India and these patterns are much helpful in making trading decisions.
Flags and Forex India
Flag formation is a form of pattern that is used for providing signals on the direction and the prices of the currencies. This is a pattern that helps in representing a very short period of time that exists in a downward or upward trend which is solid and steep. The consolidation period is indicated by a resistance line and also a support line. These lines are found parallel and give a look of a flag to this pattern. The lines of resistance and support are either sloped in a direction opposite to original trend or it is flat. If the original trend that is in the market shows a downwards movement then the pattern formed is known as bearish.
Pennants are another type of pattern which is widely available in the market and these patterns have close resemblance with flags. The pennants also have the same principles of flags and the major difference is in the shape of the area of consolidation. This formation has a consolidation area which looks like a pennant due to the convergence of both the resistance as well as support lines. If the trend that exists in the market of Forex India is bullish then the resulting pattern is called as a bullish pennant. With the downward movement of original trend, the pattern formed is called as bearish pennant. In this kind of pattern the measurement for the price target starts from the point where there is a breakout.
This is a kind of pattern that can be seen as pennants which comprises of no poles. There are various types of triangles that exist in the market of Forex India which has its own features differentiating with each other. The types of triangles are ascending, descending, expanding and symmetrical. The symmetrical triangles are the ones with supporting or resistance lines that are converging symmetrically. The symmetrical triangles are usually defined with four important points. The convergence of the lines is an indication of balance in the supply as well as demand in the market of Forex India.
Wedge is a kind of pattern which is almost similar to pennant and triangle patterns. This is a pattern which is similar to shape and development time of triangles. It behaves and looks similar to pennants without poles.
Get a free Forex PDF PLUS:
- 14 Video Lessons
- Free One-on-One Training
- A 5000$ Training Account
- In-House Daily Analysis
- Get FULL ACCESS