In the forex market’s jargon, the bullish patterns represent the rising of the price. This climbing happens in either ranging or trending markets.
The ranging markets define a price reversal, while the trending markets outline price continuation.
In this guide, we’ll discuss the top 5 bullish patterns in a trending market. If you are a trend-trader then this list is your cup of tea.
1. Bullish Triangle
The Triangle pattern appears in ranging and trending markets and marks the continuation of a trend. It consists of two trend lines. These lines are the depiction of support and resistance levels and take the shape of an opened triangle along with a converging price range.
The Triangle pattern consists of three types; ascending, descending, and symmetrical. In its ascending version, the Triangle takes the form of a bullish pattern.
The pattern starts with a sharp rise, following a decline, then moving up and down before finally breaking the upper horizontal line. When it breaks the upper trend line, there is a significant buying pressure, and the bulls are in control.
To trade, you should take long positions after the completion of the pattern.
2. Bullish Pennant
The Pennant is a continuation pattern that emerges when a large price movement follows a consolidation before moving with the trend. The initial price’s high expresses the first half of a flagpole, and when the pattern completes with the huge peak, the second half of a flagpole occurs.
The Pennants are a form of Triangle Pattern, but with the strong opening movement.
The bullish version of the Pennant is an excellent indicator of trend continuation. It surfaces in an uptrend, and you can take long positions after the confirmation of a breakout candle. The breakout candle is a last candle in the Pennant.
3. Bullish Rectangle
The Rectangle is another price continuation pattern that resembles a rectangular box. In a Rectangular pattern, the price is confined by support and resistance levels. It pops out in either uptrend or downtrend and contains several highs and lows before signaling a breakout candle.
In its bullish variation, the Rectangle forms in an uptrend. Here, you have to take positions after the breakout candle.
4. Bullish Flag
The Flag also illustrates the continuation of a trend. It establishes on shorter timeframes and is limited by two trend lines. The breakout occurs after the consolidation period.
You should locate the pattern in an uptrend in the bullish Flag and wait for the breakout candle. After that, you can go long.
5. Bullish Rounding Bottom
Many traders consider the Rounding Bottom as a reversal pattern. However, it is both continuation and reversal.
As the name suggests, the Rounding Bottom has a round structure and develops when the price bar is at the bottom.
In bullish Rounding Bottom, the price may fall at first, but it can rise again. To help identify the trend’s behavior, consider using momentum oscillators. In this way, you would only take long positions when the trend is in your favor.
To sum up, all of the above-mentioned patterns work fine in the trending markets. To make them more useful, you can combine these patterns with other technical indicators. And if your looking for a system that does this for, we suggest trying Forex Trendy
Professional traders used to analyze chart after chart to find reliable patterns on daily and even intraday time frames. Today, computing power comes into play. Forex Trendy is a software solution able to recognize chart patterns on all charts every second! Forex Trendy is a fully-automated trading system designed to analyze the Forex market for various trends and opportunities. Upon identifying either, it can recommend specific trades to its users.
For more information and a free ebook on click here!