Continuation Signals and Confirmation

Overview: Continuation signals predict that current trends are most likely to continue. These appear during bullish or bearish trends and are considered reliable. However, more skill is required in interpreting continuation trends within a consolidation (sideways-moving) trend. Many traders believe that no forms of signals are reliable in this situation but adding momentum to the analysis makes it possible to spot continuation trends during consolidation.

Most technical analysts focus on reversal signals, but this excludes equally important continuation signals. This creates a problem for analysts and traders. Continuation, the tendency for a trend to continue in the same direction until a reversal ...

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