Crypto Trading Masterclass 16 – How To Use Candlestick Continuation Patterns

Welcome to yet another masterclass in this series. I’m going to be teaching you my secrets my tools and my strategies on how I managed to do it in a short period of time.

Now I’m going to be showing you a very important thing called the continuation candlestick pattern. You see them all the time in the show and these help you. They help you understand – should I hold on to my trade or should I be exiting? We’re losing some sort of steam. They give you great massive structure. Now let’s get into it. Let’s do it so banter fam.

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What are continuation candlestick patterns? These I show on the show all the time, I show all these flags, I show all these things. Now I want to show you how important these actually are. We know those market trends and these usually play out a lot when the market is trending strongly upwards or it’s trending downwards. That’s in the word, they want to indicate that. This trend is going to continue, so what usually happens is we have a strong momentum push in either direction price then slows down. When it slows down, it starts to stall. Then what happens is we look to break out and continue that actual momentum that we were continuing before now. Why does this happen? Firstly, it allows the major indicators to reset. It allows your RSI to reset. It allows your moving averages to reset. Remember, nothing will always move directly in a straight line. We’re always going to move, we’re going to form some sort of pattern, look to break out, and continue the momentum in that way now. These are not guaranteed but this is how you want it to play out, you want it to show you that’s continuing now. Why is this important? Because if that pattern fails, it gives you an indication. Maybe, I should start exiting the trade, or I should start being very cautious because it’s not playing out. We may not continue anymore and it just gives you that little bit of understanding of where we are or that he’s saying we are playing out. We have broken that now I can either enter some more I can add to my bags this position and then where you’re basically looking at now.

If you look at this basic diagram over here, the main concept is we have a trend. The trend will come into a pattern, we will form some sort of pattern and rule goes the direction that we enter. The pattern is the direction in, we should be exiting the pattern. We’ll come in, we’ll form the pattern, we’ll break out, and then continue the actual trend now. If we jump into this main diagram over here, this gives you the basic view of the majority of the ones that we use. I think the most common ones that you’re going to see many times in your training career. You can see we clearly have a bullish and a bearish view of these. You can see they look the same. They’re just in different directions and we’ve got bull flags. We have bull pennants, we have wedges and we’ve got horizontal flags as well as the bearish ones. The same they look, the same they’re just working in the opposite sort of direction. Bulls bears now if I jump and I’ll show you this now. How do they look on the actual charts with candlesticks now? Here is the basic concept of a bullish flag. Do you see how we had strong momentum?

Then went into our pattern and then we broke out and we continued the momentum, so the bulls drove this up. We then had the bears slow it down a little bit. We had the RSI’s reset, and we then exited the trade beautifully. We broke out and then we continued. You can see we have the bearish view the exact same, just the opposite. You can see the bears were in control, they had a really strong momentum to push the downward side. We started forming the pattern we broke through and continued, you can see we entered this direction, we exited this direction. Then we jump onto the actual wedges. You can see this is a clear bullish wedge strong break up from the pattern indicators reset exits continuing the same momentum. We moved in the same with the bearishness, we entered in, we formed the pattern, we had the clean breakouts, we then looked at the horizontal flags.

You can see these are all very similar. They just come in different shapes and sizes sometimes and you just need to be able to identify that we then have the bullish horizontal flag where we come in strong momentum. Price slows down, it hovers, we know very similar highs, very similar lows. Breakouts break our test and continue and that’s a really good view. Then you can see the very same pattern. Just a different direction, strong pushdown. Then hovered the same highs, same lows and then we smashed through the bottom and we continued. We have the basic penance. You can see how many times I use these on the show. I think they’re great, I love mine confirmations and I love buying breakouts of these. As you can see we come in a strong direction, we zigzag in this sort of level, zigzag and we look to break through and when we break through then we continue the strong momentum. The exact same thing with the bearish penance where the bears are in control, we zigzag in this format. We break out and we give and this is why we love the concept of buying on supports and h buying on break out of trends because it gives you some sort of structure.

Now I want to jump onto the actual charge and I want to show you where you see these things and how you see them because these happen when the market is moving. You can see very clearly when bitcoin was trending in the zone over here, your car we formed this beautiful flag to the bottom side over there. What happened? We entered the pattern, we played the pattern out and we exited the pattern beautifully. We had the second view over here with the bear starting to get control. We formed a beautiful flag or a beautiful rising wedge.

You can see how we continued the pattern so we entered, we exited beautifully then we can see the same thing. Look at this beautiful flag bulls are in control we form the flag we then have the beautiful breakout of that zone, so do you see what they do remember. We’re going to be using indicators before that to get those beautiful entries. But once you end, now you’re rallying. Now we form the pattern we want to break a certain point to continue that pattern. All of a sudden, we don’t break. It might give you a little hint and maybe take some profits. I mean I’ll look after the portfolio. Shihad gives you a nice structural view of that now. 

This article is a transcription of a video made by Crypto Banter

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