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How do I trade the
Pennant Pattern?
The Pennant pattern is a continuation stock chart pattern that occurs in all time frames. The formation is a symmetrical triangle that appears in a trending stock when it temporarily pauses and forms the pattern before regaining the momentum of the current trend. This formation is basically the same as a
flag pattern,
the only difference is the trend lines are parallel in the flag pattern and don,t converge to form a triangle. Look at the chart below.
In this chart you can see a pennant formation and a flag formation. Look at the pennant formation, the stock is in an uptrend and pauses for a short period. When a trend line is drawn connecting the highs, and one connecting the lows, they converge to form a triangle.How can this help me make money in the stock market? This simple little pattern can help you make important decisions like, when to buy, when to sell, when to hold. Study your charts! When you see this formation you will know that the odds are in your favor that the trend will resume. If you could foresee the future you would be a stock market millionaire. This and other patterns can help you know whats about to happen. No pattern or trading strategy is perfect, but they can give you an edge.
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