The complex dynamics of the forex market often form various price patterns such as the Head and Shoulders, triangle, flag, Gartley, and many more.
Market tendencies form patterns where prices repeat their own history. Expert traders have tested the patterns that occur and often become the basis for trading decisions such as trend continuation or trend reversal.
One interesting trend continuation pattern to explore is the High and Tight Flag Pattern. This is part of the flag pattern which has the main characteristics of a flagpole and a flag. Flagpoles are formed by sharp price increases, usually ranging from 50% to 100% indicating strong buying interest and momentum. This is followed by a flag pattern which is marked by a short consolidation where the price moves sideways or slightly downwards around 20% of the height of the flag pole.
When the price breaks through the upper limit of the flag with increasing volume, this often signals the resumption of an uptrend thus giving traders a buy signal for the continuation of the trend.
View attachment 7140
This pattern is considered a reliable trend continuation pattern with a probability above 80%, but this pattern is rarely formed in a short time, often the pattern appears in a matter of weeks. To understand the High and Tight Flag Pattern in more detail, read here.
Market tendencies form patterns where prices repeat their own history. Expert traders have tested the patterns that occur and often become the basis for trading decisions such as trend continuation or trend reversal.
One interesting trend continuation pattern to explore is the High and Tight Flag Pattern. This is part of the flag pattern which has the main characteristics of a flagpole and a flag. Flagpoles are formed by sharp price increases, usually ranging from 50% to 100% indicating strong buying interest and momentum. This is followed by a flag pattern which is marked by a short consolidation where the price moves sideways or slightly downwards around 20% of the height of the flag pole.
When the price breaks through the upper limit of the flag with increasing volume, this often signals the resumption of an uptrend thus giving traders a buy signal for the continuation of the trend.
View attachment 7140
This pattern is considered a reliable trend continuation pattern with a probability above 80%, but this pattern is rarely formed in a short time, often the pattern appears in a matter of weeks. To understand the High and Tight Flag Pattern in more detail, read here.
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