Continuation
A continuation is a pause in a trend after which the price resumes in the same direction; patterns such as flags are called continuation patterns.
A continuation is a pause in a trend after which price moves on in the same direction. Chart patterns such as flags, pennants and channels are called continuation patterns. They show a likelihood, not a guarantee.
- Category
- Price Action
- Reading time
- 3 min
- Also called
- Continuation pattern, Trend continuation
- Updated
Continuation in plain words
Continuation patterns point to the current trend carrying on after a pause.1
Flags and pennants are short pauses — a brief sideways drift before the earlier move picks up again.2
They usually follow a sharp, high-volume move up or down.2
How to trade a continuation
Identify the trend
Look for a strong prior move.
Spot the pause
Spot the pause: a small flag or pennant after a strong move.2
Check the move before
Check what came before — a steep move on heavy volume.2
Know other forms
For longer pauses, a sloping channel between two trend lines can also act as a continuation pattern.3
Enter on the break
Buy when price leaves the pause in the trend direction.
Place a stop
Below the pause low for longs, above the high for shorts.
Worked examples
Example 1 — Bull flag
Defined riskHypothetical rise 40 → 48, flag 46–47.50, break at 47.60; stop 45.90, 100 shares.
| Risk | 1.70 × 100 = 170 |
The brief pause resolved in the direction of the original move, as continuation patterns suggest.2
Example 2 — Rising three methods
BullishA long green candle, three small red candles inside it, then a long green candle.
| Pattern | 5 candles |
Rising three methods: a big up candle, three small down candles inside its range, then another big up candle.1
Example 3 — Failed flag
−170The same flag breaks down to 45.80 instead.
| Stop hit | −1.70 × 100 = −170 |
These patterns only suggest the trend will resume — this one didn't, so the stop did its job.1
Continuation vs reversal
| Aspect | Continuation | Reversal |
|---|---|---|
| Trend after | Same direction | Opposite |
| Examples | Flags, pennants | Head and shoulders |
| Duration | Usually short | Often longer |
| Entry | Break with trend | Break against trend |
Where continuation patterns help
Trend
Joining a Trend.
Entries
Better than chasing; like a Pullback.
Breaks
Timing a Breakout.
Strategy
Part of Trend Following.
Advantages and disadvantages
Advantages
- Join a trend at a defined level.
- Clear stop below the pause.
- Works across markets.
Disadvantages
- Patterns fail.
- Hard to tell from reversals early.
- Subjective drawing.
- Low volume breaks are weak.
Going deeper
Read as far as you need. Each level builds on the one before it.
Idea
Beginner
Where reversal patterns warn of a turn, continuation patterns point to the trend resuming.1
Flags and pennants
Intermediate
Look for a strong, high-volume move just before the pause.2
Candles
Advanced
The candlestick version, rising three methods, frames three small pullback candles between two strong up candles.1
Common mistakes
Entering before the break
Wait for it.
Ignoring the prior move
No strong move, no flag.
No stop
Use the pause extreme.
Assuming it always works
Size for failure.
Check your understanding
Test yourself before moving on. Each answer comes with an explanation.
Key points to remember
- A pause within a trend.
- Flags and pennants are classic examples.
- Usually follows a sharp move.
- Enter on the break.
- Patterns can fail.
Frequently asked questions
Is a pullback a continuation?
Which timeframe?
Do I need volume?
Further learning
- Trend
Trend basics.
- Reversal
The opposite case.
- Candlestick
Candle patterns.
- Breakout
Entry on the break.
Sources
This article is written in our own words. The sources below support the specific facts, rules and figures marked with a number in the text. Links open the original publisher’s page.
- CMC Markets. Candlestick Patterns Explained: A Beginners Guide (opens in a new tab) Checked .
- StockCharts ChartSchool. Flag, Pennant (opens in a new tab) Checked .
- StockCharts ChartSchool. Price Channel (opens in a new tab) Checked .
Read more elsewhere
- Trading Metrics (our sister site): Continuation Patterns (opens in a new tab)
Educational content, not financial advice. Examples use hypothetical prices and simplified costs; actual fees, margin rules and regulations vary by broker, market and country. Trading Metrics is our sister site, under the same ownership; we are not affiliated with any other publisher linked above. Last reviewed . Report an error or request a source credit.