Group: Trend Continuation
Definition:
After a decline, the market forms a small symmetrical triangle that serves as a pause before another downward move.
Key Characteristics:
- Strong downward impulse
- Small symmetrical triangle
- Downside breakout
How to Trade:
Enter short on a breakout below the lower boundary. Place the stop-loss above the pennant. The profit target equals the length of the flagpole.
Common Mistakes:
- Entering before confirmation
- Ignoring fundamentals (news events often trigger false signals)
Conclusion:
A reliable continuation signal for trend-following strategies in bearish markets.
