Profitable Forex Pennant Patterns and Winning Charts

Profitable Forex Pennant Patterns and Winning Chartsforex chart patterns 880 880 CA$5.76, 4/388=1.0%forex chart 18,100 18,100 CA$5.14, 7/388=1.8%currency pair 3,600 3,600 CA$7.16, 7/388=1.8%pennant pattern 720 720 CA$1.68, 8/388=2.1%Word Count=387

The Pennant Pattern is one of the most common Forex Charting patterns usd in technical analysis and breakout pattern analysis. Most Professional Forex Traders would understand that in looking for a trending currency pair, there will always in brie periods where the trend slows or retraces. A true pennant pattern is a sign of continuation of the prevailing trend. It should help assure the holder of the currency pair that the trade is intact and still has some legs. In fact, from a forex chart pattern perspective, the pennant pattern is one of the more reliable signs of continued trend.A pennant pattern is often compared to triangle formations. And, in fact, the two are very similar. But there are two important differences between them. The most important feature is the nature of the trend. Specifically, a pennant pattern will be seen in forex chart patterns after a drastic increase in price over a short period of time.At some point traders of the currency pair will take profits, or absorb new information-slowing the momentum. In a downtrending currency pair, this will result in converging trendlines where the resistance trendline is met sooner and sooner as the price tries to move up. In an uptrending currency pair, a pennant pattern is also identified by converging support and resistance trendlines. But in this case, support is met sooner and sooner while the support trendline moves in an upward direction.The second important difference between a pennant and a triangle pattern is the duration of the pattern. Like the trend that leads into the pennant, the pattern forms over a short period of time. As a result forex traders need to be prepared to take action much more quickly then when a currency pair breaks out of a triangle pattern.Traders who analyze forex chart patterns often refer to pennant patterns as half mast formations. Because, just like with flag patterns, it is believed that the distance travelled by the price-whether up or down-has only reached half of its eventual price during the first leg of its journey. The pennant pattern is an important continuation pattern. But its not right every time. As with any of the forex chart patterns, the prudent trader will always look for confirmation of the pattern of a currency pair using other forex chart tools.