A Technical Approach To Trend Analysis: Practical Trade Timing for Enhanced Profits

6. Continuation Patterns—A Bend in the Trend

Trend analysis consists of an unending series of reversals and continuations. Some analysts pay little heed to continuation, however. The perception is that continuation tells you only to do nothing, so there is little point to tracking it. However, continuation is much more than just a reminder to do nothing.

Many books on the topic of technical analysis pay little or no attention to continuation signals. One of the major books in this area does not mention the topic in any way except for a passing reference to the runaway gap.¹

Many other books associate continuation patterns with consolidation (see Chapter 8, “Consolidation Patterns—The Sideways Pause”), periods in which price pauses and moves sideways ...