Home > Uncategorized > Traders roundtable: explaining the Continuation pattern

Traders roundtable: explaining the Continuation pattern


A continuation pattern requires a “successful” previous trade.

Each of the original patterns: WO, TS, 5DD, maxpain:  all are probabalistic hypotheses; we ventured into the trade on the possibility it may reward our risk;

The success of the first pattern gives us reason to believe (in the form of evidence!) that the target is moving in our favored direction; the Continuation pattern, then, simply is a way to frame a new trade on the same target, providing:

1. we can still see a 2:1 reward:risk ratio, using the most recent swing high (it may have made a new swing high on the last cycle)

2. The pullback which caused us to exit the trade did not create a new swing low.

3. we use the Universal Entry (UE) to get in: .05 over yesterday’s High

I used to mean that I had cashed a winning trade, but now I am content to have the pattern work whether I was in it or not.

I may not have been able to take the trade for any number of reasons and I decided I should  not let that keep me out of the continuation trade

5 dau down pattern, Continuation tarde frame

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