Continuation PatternsContinuation patterns are chart patterns, which are formed due to temporary profit booking, in an ongoing trend.Pattern Trading gives us consistent, profitable trades. In an up trend, the momentum slows down due to periodic profit booking. When ever the supply increases more than the demand, the price comes down. This will in turn becomes attractive for the bulls or buyers. The demand increases and the price moves up. Similarly, in a down trend, periodic profit booking slows down the momentum. When ever the demand increases more than the supply, the price rises. This will in turn becomes attractive for the bears or sellers. The supply increases and the price drops down. This tug of war between buyers and sellers, moves the prices up and down causing patterns in the stock charts, before they continue in the direction of original trend. They provide us early signal either to book profit or make a new entry. They can be bullish patterns or bearish patterns.
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