One of the most important and with this common chart patterns Forex is a pattern pennant. Despite the fact that he, like other figures can be bullish or bearish pennant has a number of features it only affect the strategy of the trader, razglyadevshy chart this model.
Pennant refers to the classic figures of technical analysis applied in the use of graphical methods of Forex. Visually, the pattern is very much like a symmetrical triangle , since he is also symmetrical. It is noteworthy that at the time of the formation of this chart pattern is much less, and the trend lines drawn through the upper and lower peaks converge at the top of a sharp angle.
Pennant flag and one common characteristic - both figures confirm the trend to continue the dominant trend. In this pennant against its own flagpole directed slightly opposite direction. It is considered the main flagpole element differentiating from the symmetrical triangle pattern.
As with other similar models on the triangle pennant is of two kinds:
1. Bear with a down flagpole, and the pattern formed on a minimum of motion.
2. Bull, which sent up the flagpole, and a pennant is at its maximum.
See this as a graphical model on a complex graph of the currency market?
The first - the mandatory presence of a pronounced flagpole in a sudden sharp momentum in either direction. Watching further developments on the high or low pulse, you can see the body forming a visually reminiscent of a symmetrical triangle. However, the time it will take a fraction. If the lines held by highs and lows sharply at one point agreed to form a small triangle - the pennant in front of you.
To enter the market in the best moment of breakdown of one of the lines of the pattern in the direction of the corresponding extension of the general trend of the flagpole. For a bearish pennant use sell stop, and for bovine - buy stop order. When using the recommended time intervals to enter the market at the beginning of the next period, and to bargain toward previous breakdown.
Undoubtedly the best option will be the opening transaction for retest punched trend lines, but like all good things, this situation is very rare. Do not forget to be careful - set stop-loss just above (below) the previous bottom-up (pull-down) peaks.
Profit target set at a distance of no more than the most wide face shapes. "Profit" can also be placed on the importance to the resistance level of prices, in accordance with the rules of graphic analysis. Aerobatics, when the graph reaches the "Take" put the top of the flagpole.