In Depth Look at Continuation & Reversal Structures/Patterns

14 wrz 2020

Hi everyone:

In this educational video, I will explain how I determine reversal and continuation structures/patterns in the market.
Many have asked me to break this topic down more in depth and in live, so I hope I can address all the questions I get on this.

So, in my opinion there is only 2 main type of structures/patterns:

Continuation Structures
Reversal Structures

The key to find consistency in price action trading is to identify what kind of correction the structure is forming. Is it a reversal, or is it a continuation?
Since after a correction is finished, we are likely to see an impulse move from that structure, and it's good to understand when and how likely that structure will either continue or reverse the current price.

Below I will list out some of the most commonly identified reversal and continuation corrections.
To me, it's not too important what people call these structures/patterns, but what you need to determine is, is it a reversal or continuation structure?
Because, the market is ever evolving, and price action structures/patterns are also evolving.
Sure we can learn a lot from the typical “Textbook” structure and patterns, but they often or not won't be picture perfect,
and we need to utilize what else the market is telling us to determine the structures.

Continuation Structure
-flag
-channel
-triangle
-pennant

Reversal Structure
-wedge
-ascending/descending channel
-Double Tops/Bottoms (M and W pattern)
-Head and Shoulder


Understanding how the price has been moving thus far, will give you a more clear understanding of what the structure is going to form.

For example:

-When we see price at the top of a HTF structure, slowing down and correcting itself up, you will be looking for reversal structure from the top, and looking for the sell.

-When we see prices broken out of the HTF structure, you will be looking for a continuation structure to form and continue the buy.


As always ,feel free to ask me questions or comments.

Thank you