Patterns Identification For Trend Continuation Trade Setups
Updated
Hi fellows, This is an example for patterns identification in a bearish market many traders struggle to identify patterns in a particular trending market for Trend Continuation Trade Setups. This is a perfect example for Pattern Identification.
1. IMPULSE ( First Entry )
In this chart, We have Bearish IMPULSE from top( that means market is setting up for a bearish trend) If you read that IMPULSE on time you can catch the wave right from the top for higher potential. We call this entry based on Trend Reversal Point. There are lot of names which you can use for that LIKE ( Potential Trend Reversal Point, Supply and Demand Zone, Support and Resistant E.T.C)
2. TREND CONTINUATION PATTERN ( Correction, Consolidation or Accumulation )
In this chart, From Top after the impulse we have a lower degree channel which was giving an indication that price is not going to continue until it finish the TREND CONTINUATION PATTERN FORMATION or Flag.
3. FLAG ( Trend Continuation Pattern ) ( Second Entry )
Once Flag completed, there is an other opportunity for sell which we called Entry based on TREND CONTINUATION PATTERNS. Here you can use Oscillators, Moving averages or any other indicator which can give you an indication that TREND CONTINUATION PATTERN is going to finish or Correction, Consolidation, Accumulation is going to finish for the next impulse or for the next wave.
Once you understand that Pattern is about to end and Next wave is about to start you can sell Before the Breakout or after the Breakout.
We call them:
1. Entry before the breakout:
2. Entry After the breakout:
We prefer to enter in the market before the breakout for better risk reward ratio.
4. Next IMPULSE
Once next wave or impulse appears and price again forms Trend Continuation Patterns you can repeat the same steps which you have done on the flag. But this time you might not see the flag may be you can see the Triangle as you can see in the example. Until price do not forms IMPULSE from the bottom and keep forming the trend continuation pattern you can keep adding more positions with reasonable risk. Please Keep In mind one thing, Once a wave already moved a lot adding more position without understanding the bigger pattern gonna be dangerous so always add more positions with care because buying on top and selling on bottom is dangerous so you need to understand the bigger picture so that you can understand whats going on bigger picture and where the high potential wave is. Always add more positions there where you see that, that particular wave has a huge potential and will not reverse any time soon. For that you have to analyse from bigger time frame to lower time frame so that you can pick that asset or pair where you will see that in longer term that pair will remain in a trending market not in sideways market.
5. Triangle (Trend Continuation Pattern ) ( Third Entry )
Repeat same steps which you have done on the flag
6. Flat channel ( Trend Continuation Pattern ) ( Fourth Entry )
Repeat same steps which you have done on the flag and Triangle
7. Bullish IMPULSE
Once you will see the bullish impulse from the bottom you can read that impulse and momentum on lower time frame. This is time to take the profit off from the market and time to buy for the change in trend.
Always remember. Patterns form with in the patterns so one pattern will show you the continuation and other one will show you the reversal so read them correctly.
In this chart, You can see bearish wave is running with in the higher degree descending channel and that channel is a trend reversal channel and in longer term price will change the direction to the upside and lower degree patterns are forming within that higher degree channel for the previous trend continuation and we were trading in that higher degree pattern so always remember that at some point that higher degree pattern will change the direction of the market.
1. IMPULSE ( First Entry )
In this chart, We have Bearish IMPULSE from top( that means market is setting up for a bearish trend) If you read that IMPULSE on time you can catch the wave right from the top for higher potential. We call this entry based on Trend Reversal Point. There are lot of names which you can use for that LIKE ( Potential Trend Reversal Point, Supply and Demand Zone, Support and Resistant E.T.C)
2. TREND CONTINUATION PATTERN ( Correction, Consolidation or Accumulation )
In this chart, From Top after the impulse we have a lower degree channel which was giving an indication that price is not going to continue until it finish the TREND CONTINUATION PATTERN FORMATION or Flag.
3. FLAG ( Trend Continuation Pattern ) ( Second Entry )
Once Flag completed, there is an other opportunity for sell which we called Entry based on TREND CONTINUATION PATTERNS. Here you can use Oscillators, Moving averages or any other indicator which can give you an indication that TREND CONTINUATION PATTERN is going to finish or Correction, Consolidation, Accumulation is going to finish for the next impulse or for the next wave.
Once you understand that Pattern is about to end and Next wave is about to start you can sell Before the Breakout or after the Breakout.
We call them:
1. Entry before the breakout:
2. Entry After the breakout:
We prefer to enter in the market before the breakout for better risk reward ratio.
4. Next IMPULSE
Once next wave or impulse appears and price again forms Trend Continuation Patterns you can repeat the same steps which you have done on the flag. But this time you might not see the flag may be you can see the Triangle as you can see in the example. Until price do not forms IMPULSE from the bottom and keep forming the trend continuation pattern you can keep adding more positions with reasonable risk. Please Keep In mind one thing, Once a wave already moved a lot adding more position without understanding the bigger pattern gonna be dangerous so always add more positions with care because buying on top and selling on bottom is dangerous so you need to understand the bigger picture so that you can understand whats going on bigger picture and where the high potential wave is. Always add more positions there where you see that, that particular wave has a huge potential and will not reverse any time soon. For that you have to analyse from bigger time frame to lower time frame so that you can pick that asset or pair where you will see that in longer term that pair will remain in a trending market not in sideways market.
5. Triangle (Trend Continuation Pattern ) ( Third Entry )
Repeat same steps which you have done on the flag
6. Flat channel ( Trend Continuation Pattern ) ( Fourth Entry )
Repeat same steps which you have done on the flag and Triangle
7. Bullish IMPULSE
Once you will see the bullish impulse from the bottom you can read that impulse and momentum on lower time frame. This is time to take the profit off from the market and time to buy for the change in trend.
Always remember. Patterns form with in the patterns so one pattern will show you the continuation and other one will show you the reversal so read them correctly.
In this chart, You can see bearish wave is running with in the higher degree descending channel and that channel is a trend reversal channel and in longer term price will change the direction to the upside and lower degree patterns are forming within that higher degree channel for the previous trend continuation and we were trading in that higher degree pattern so always remember that at some point that higher degree pattern will change the direction of the market.
Note
First Example we are having here is the USDCAD pair. In this chart you can see the Higher degree flag or ascending channel after the strong impulse on left side. So this is the bigger picture and higher time frame analysis. We were anticipating that in longer term price will fall in the higher degree flag or ascending channel and when price will start to fall we will track that bearish wave and will trade on that wave.
Note
This is the update of that previous chart on lower time frame. In this chart you can see once higher degree patterns completed and price was showing nice price action on lower time frame and forming impulse we started to sell this pair from top based on the first impulse. which i have explained at the top
Note
In these charts you can see that after forming impulse price started to form TREND CONTINUATION PATTERN Which we were anticipating after the impulse. Remember this TCP is forming on lower degree and we were anticipating the wave on higher degree from the top which you can see on higher time frame. Once that pattern completed we were selling that pair before the breakout.Note
Here in this chart you can see the breakout of the TREND CONTINUATION PATTERN, Note
In this chart you can see that once that breakout came and impulse completed price went into another TREND CONTINUATION PATTERN. And once price completed that TCP we were selling this pair again before the breakout. Note
In this chart you can see that price has completed almost 60 to 70 Percent of the wave the wave the wave we were anticipating from the top. we were anticipating the bigger correction on higher time https://frame.https://www.tradingview.com/x/SLWroPr4/Note
In this chart you can see the bigger daily TREND CONTINUATION PATTERN like flag was forming and breaking after the completion. Note
In this chart you can see the wave has completed the wave we were anticipating from top and now it is completing the higher degree flag or ascending channel. Note
The second Example we are having here is the UKOIL. In this chart you can see we were anticipating the bullish wave for the upside and we were anticipating that the previous pattern has completed and price will reverse into the bullish side.
Note
In this 15 minute chart you can see that price is forming the impulse on lower degree and setting up for bullish wave and it can be seen clearly on lower time frame. Note
In the following charts you can see that price was keep forming TREND CONTINUATION PATTERNS from lower degree to higher degree and keep rising and completed the wave at the top.
Note
In the last chart you can see the impulse was there and how strong thats impulse was. That is the first signal that the previou bullish trend is finished and we were having the change in trend.Note
In the following charts you can see price is just repeating the same price behaviour the price behaviour we have seen in the last bullish wave and almost same patterns the patterns we have seen in the last bullish wave. 
In this chart you can see we are waiting for the same impulse which we have seen in last examples for change in trend.
Note
Here is the Perfect example. Note
I hope these charts will help many traders in their trading and they will be able to understand how to identify patterns and how to trade on them and how to track the waves and how to look for reversal and what kind of patterns are common in the market and repeat them self again and again. Thanks for the feedback and Good Luck fellows in your trading.
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