In technical analysis it is possible to observe the graphic figures that confirm the current trend. These figures are known as continuation patterns. They reflect a relatively short period of market consolidation, after which there are breakthroughs of the figures in the movement direction of the previous trend. The most important figures are continuing:

• Flags

• Pennants

• Triangles

• Wedges

• Rectangles

Flags. The flag comprises information about the movement direction and target rates. This figure reflects a short period of consolidation within

steady and steep upward trend. The figure for this limited consolidation support and resistance lines which are parallel or converge slightly, forming a shape similar to the flag (parallelogram), inclined, typically in the opposite slope of the current trend or disposed horizontally. Steep the previous trend line resembles a flagpole.

If the original trend is falling, the figure is called a bear flag (see Fig. 4.29). As can be seen from Fig. 4.29, the trend line slopes steeply down. Flagstaff is the segment AB. The consolidation period is when the price ranges between the support and resistance BE CD. When the price breaks through the support line at point E, the trend resumes fall, with the goal level, measured from the point E. The distance from this point to the target is approximately equal to the length of the flagpole AB, delayed from the point of breaking the support line BE. Based on the price of rice. 4.29 height of the flagpole is the difference 140.00 120.00 = 20.00. A break at the 125.00 price target stands at 125.00 20.00 = 105.00.

Fig. 4.29. Diagrams figure Bear Flag

An example of real flags in a bull trend is shown in Fig. 4.30.

Fig. 4.30. Examples of actual figures of bull flag and Windows exhaustion in the chart of Swiss franc.

Pennants. Banners are similar in character flags and apply them to the same analysis. The only difference between them is that the formation of the pennant support and resistance lines converge significantly. If the original trend is bullish, then the graphic figure is called bullish pennant (see Fig. 4.31). Fig. 4.31 The segment AB is the flagpole. The figure reflects the consolidation of the SVD. At the break of the resistance line BD market price target is the level point, the distance to the target price DE AB is the length of the flagpole. This distance is measured from the breakout point. Based on the price of rice. 4.31 height of the flagpole pennants equal to the difference of 1.5500 1.4500 = 0.1000. When the breakout through the resistance at 152.00 price target stands at 1.5200 + 0.1000 = 1.6200.

1.6200

Fig. 4.31. Diagrams classic bullish pennant

If the original trend is falling, the figure is called a bearish pennant (see Fig. 4.32). Fig. 4.32 The segment AB is the flagpole. The figure reflects the consolidation of the SVD. At the break of the resistance line BD market price target is the level point, the distance to the target price DE AB is the length of the flagpole.

Based on the price of rice. 4.32 height is the difference flagpole pennants 139.00 119.00 = 20.00. At the break of the support line at 120.00 price target stands at 120.00 20.00 = 100.00.

120.00

119.00

Fig. 4.32. Charts bearish pennant

A real example of a bearish pennant is shown in Fig. 4.33.

Triangles. Triangles can be regarded as flags without flagpoles. There are four types of triangles: symmetrical, ascending, descending and expanding.

The symmetrical triangle consists of symmetrically converging support and resistance lines held, a total of at least four points (see Fig. 4.34 and 4.35.) Symmetrical convergence of these lines is a reflection of

Fig. 4.33. An example of a real bear pennant on the chart the yen.

existing in the foreign exchange market balance between supply and demand. Therefore, in principle, a breakthrough may occur in any direction. However, in the case of a bullish symmetrical triangle, the breakout occurs, most likely in the direction of the prior trend, justifying the name of a triangle as a continuation pattern.

As shown in Fig. 4.34, converging lines are symmetrical. The descending resistance line drawn through points B, D and F. The rising support line passes through the points A, C, E and G. The price target is either a distance of HH from the breakout point H is equal to the base of the triangle BB, or at the intersection of the line BI (parallel to the support line AG) with the price line GI. Trading volume at the end of formirorvaniya triangle is markedly reduced, indicating that the uncertainty of the market, but the breakthrough of the triangle is accompanied by increased volume.

Based on the price of rice. 4.34 price target or equal to 1.5500 (width of 1.5000 1.4000 = 0.1000 added to the breakout level 1.4500), or will be slightly higher this value, while at the intersection of a line parallel to the support level, with the price line after the break.

Other types of triangles in Fig. 4.36 is seen descending triangle chart, which is formed by a horizontal support line and a descending resistance line. This figure reflects a situation where the market supply exceeds demand. Price breakout of the triangle is expected to bottom. Analysis of the descending triangle also allows you to determine a price target, which is the point of breakthrough

a distance equal to the base of the triangle. As can be seen from Fig. 4.36 support line drawn through the points A, C, E and G, horizontal. Converging with her resistance line passing through the points B, D, F and H, is directed downward. The price target is at a distance equal to the width of the base AA , deferred from the breakout point I line IF. From the data in Fig. 4.36 price target is 1.3000 (the difference between 1.5000 1.4000 = 0.1000,

Fig. 4.34. Diagrams classic bullish symmetrical triangle.

Fig. 4.35. An example of a real bear and bull symmetrical triangles on the graph euros.

subtracted from 1.4000). Trading volume as it approaches the apex of the triangle is reduced, but increases dramatically at the time of the breakout.

Expanding triangle, or megaphone is a mirror display e any of the above ordinary triangles in which the line of the previous trend is not adjacent base of the triangle, and its top (see Fig. 4.37). Change in trade volume occurs respectively the volume increases as the formation of an expanding triangle. As can be seen from Fig. 4.37 support line passing through points B, D and F, and a resistance line passing through A, C and E, differ. The price target after the break is the level at a distance equal to the base of GG , deferred from the breakout point G. From the data in Fig. 4.37 price target

Fig. 4.36. Classic descending triangle chart

equal to 102.00 (difference 101.00 100.00 = 1.00 added to 101.00). An example of the figure Megafon is shown in Fig. 4.38.

Wedges. Wedge is a close relative of the triangle and the pennant. He is close to both in form and in the form of time, but in terms of form and analysis, it is more like a pennant without a flagpole (see Fig. 4.39 and 4.40.) A break from it occurs in a direction opposite to its slope, but similar to the direction of the prior trend. Depending on the trend, the wedge can be bullish (as in Fig. 4.39) and bearish. By the presence in the charts of the wedge can be judged only on the continuation of the trend. The purpose of this figure, the prices are not determined.

Rectangles. The figure of Rectangle reflects the period of market consolidation. After breaking out of her price of the currency is likely to continue the previous trend. Its violation may, however, lead to a shift from a continuation of the trend reversal. This figure is easily recognizable and can be regarded as a small sideways. In the event of an uptrend and the breakout of his prices up, the rectangle is called bullish (see Fig. 4.41 and 4.42.) Price target is the level spaced from the breakout point at the height of the rectangle. As shown in ris.4.41, price movement occurs between the well-

visible horizontal lines of support and resistance. The real breakthrough in the consolidation period can occur through either side of the rectangle. The price target is at a level G, spaced from the breakthrough point H by a distance GH, equal adjustment figures GH. Based on the data shown in Fig. 5.31, the goal is the level of 1.6200 (raznost1.6100 1.6000 = 0.100 added to 1.6100).

In the event of consolidation on a falling trend and its sequel came in a rectangle called the bearish (see Fig. 4.42). Based on data from this figure, the price target after the break will be equal to 100.00 (a difference of 102.00 101.00 = 1.00 subtracted from 101.00). An example of a real bear the rectangle shown in Fig. 4.43.

102.00

101.00

Fig. 4.37. Diagrams of classical expanding triangle

Fig. 4.38. An example of the figure Megaphone in the chart pound.

Fig. 4.39. Diagram of classic bull wedge.

Fig. 4.40. An example of a real bullish wedge Windows breakout from his chart yen.

A C E G

Fig. 4.41. Diagrams classic bullish rectangle.