Entrance to the transaction when the price breaks the upper border of the canvas of the . The zone from which everything is decided is indicated by red. The first target is at a distance equal to the maximum height of the "canvas" of the figure from the breakdown point, the other target is at a distance equal to the height of the flagpole from the breakdown point.
Another variant. If the price breaks down the downtrend line, it will mean a continuation of the downtrend.
About the .
Pennant - the basic pattern for continuing the trend movement, is a Flagstaff and two converging horizontal lines. This figure resembles a small symmetrical triangle.
The graphic “Pennant Pattern” and its views behind the form: symmetrical , ascending and descending are classic figures for continuing the trend. There is a descending and ascending behind the trend. The figure got its name because of the converging lines of .
The formation of “Pennant” means that the situation of overbought / oversold has formed on the market, when the rapid movement of prices has led to an imbalance, so the market should take a “rest” before the next movement. That is, the pattern is formed at the moment of a pause on the trend, and is a short-term consolidation, after which the price usually continues to move in the direction of the trend.
1) The emergence of such a model is preceded by a sharp movement in prices in the form of an almost straight line, accompanied by a significant of trade.
2) "Pennant" has an outline similar to a small horizontal symmetrical triangle.
3) "Pennant" are formed approximately in the middle of the price movement.
4) When a "pennant web" is formed, the step and the trading decreases.
5) Trading increases when the "pennant web" breaks in the direction of the trend.
6) "Pennant" is formed more quickly with a downtrend.
There are two types of for the trend:
1) "Ascending ."
2) "Downward ."
a) “Ascending pennant” - a figure arising from the development of a strong impulse aimed at overcoming the . Its appearance on the chart is accompanied by a sharp increase in trading volumes, as a result of which one or two long ascending candles, called the “flagpole”, can be observed. Then, after the impulse reaches a certain strong price level, the formation of a “canvas” similar to a small triangle occurs. After which, in most cases, the further development of the current trend continues.
b) “Downward pennant” - a figure absolutely identical to its ascending formation, but directed from top to bottom during the development of a strong trading impulse on a negative trend. Outwardly, the “descending pennant” differs from the ascending one only in direction.
In the form of "Pennant" is divided into three types:
a) Symmetric (which everyone is used to).
b) Ascending .
c) Downward .
I will describe the type of that is currently being formed on the chart. Downward (in the shape of the canvas). Do not confuse with the trend! Trend down is the opposite!
"Downward Pennant" (in the shape of the canvas!). target
This model is very similar to a descending without a flagpole.
During the formation of the “Descending ,” the amplitude fluctuations decrease, while the indicators also decrease. But as soon as the figure breaks down, the indicators increase sharply.
There are two main trading tactics for various Pennants:
1) Trade on the distance of the flagpole of the figure.
2) Trade at a distance of the maximum height of the instrument - the central part of the (the height of the "canvas" of the figure).
I showed these two options on the chart.
Different situations when forming the figure "Downward Pennant" (in the shape of the canvas).
1) If a downward formed on a , then the figure is likely to become a reversal pattern. Moreover, the strength of the reversal signal will be average or even higher than average.
2) If the price breaks the and moves down, then this will be a weak signal, which is not worth trading.
3) If the price has broken down a on a bull trend down (support line), then in this case the signal will have weak strength. Therefore, it is advisable, in this case, to refrain from trading.
The practice target are similar to those in the “Ascending Pennant” or “Symmetric Pennant”. The first target is at a distance equal to the maximum height of the "canvas" of the figure from the breakdown point, the other target is at a distance equal to the height of the flagpole from the breakdown point.
BTC 2016. Flat 77 days and a shot. The trend.
Nothing has changed, everything is the same. The “Flag” and “pennant” have the same sales target.
That with a high degree of probability the price will stop locally at the level of $ 7900-8000
Watch the red zone that I highlighted.
On the BTC pennant, it's position, shape and direction out of the wedge, indicates probability north. For new traders, that creates a probability also for the south.