How to Trade With Pennants Chart Patterns

monarchcb.com - Pennants Chart Patterns or chart patterns in the form of pennants are patterns that are similar to rectangle chart patterns, in that they are continuation patterns. There are 2 different patterns of this pennants, namely bearish pennants chart patterns and bullish pennants chart patterns.

After forming a movement that leads up (uptrend) or down (downtrend) traders, traders and consumers start to get tired and take a break for some time (confirmation) by making patterns such as pennants or triangles sideways before the conclusion and then continue the movement first.

When prices are consolidating, there will be many traders, traders and consumers who decide to jump and continue the movement with full power.

Bearish Pennants Chart Patterns

A bearish pennants are formed by a movement that leads to a sharp downtrend, after which many traders enter, as a result, there are some traders who close their positions to take profits, as a result, a confirmation method is also created in the form of a banner.

When it continues to be a lot of traders, traders enter until the price also drops very strongly and continues the first movement (downtrend).

As we observed that the price will continue its movement after being able to break the support level and we can open a position with the entry level below the support level and we should want to get enough profit :) but we must always be careful if in fact we are wrong is to place a stop loss above the pennant pattern to reduce the exact loss.

Bullish Pennants Chart Patterns

If then this is another pennants chart patterns thing, the bullish pennants are created as a result of the gathering of the bulls (bulls) who are able to move the price upwards after facing a confirmation first.

So at the time of confirmation, a lot of consumer traders (bulls) entered the market, finally the price could also be raised firmly upwards. As a result, when we open a position above the resistance level, we will get enough profit as shown in the picture below.

A kind of previous review that we must always hold consistently in terms of risk management is to place a stop loss and take profit. For a stop loss, we can place it under the pennant pattern and take a profit of at least the size of the pennant pillar because even though this pennant pattern is small, the signs that are informed are a fairly large prolonged sign.