After fast move of the price, the market needs time to absorb impulse of market trend. It does a pause to take breath, while both the volume and norm of change in price sharply decrease. During this period of consolidation the new price level is exposed to continuous check of support and resistance level. For knowing models, this phenomenon it is shown in the form of familiar forms of Flags, Pendants and Rectangles.

At the heart of formation of these models of continuation rather simple mechanics lies. The next return of the market to an average condition mortgages a basis for a new push in the same direction. The effective example of this process is found in the current bull market. Popular strategy of purchase reflects the basic psychology observed on these models in falling.

In a series of sharp movements of a trend of congestion tend to alternate between simple and difficult, both on time and on the size. The bargain is more protected, when the previous model was also short and simple.

At research of models of continuation, the technical analyst should pay steadfast attention to proportionality. This visual element will confirm or cancels all other predicting supervision: the compressed ranges should be proportional both on time and on the size to previous trend. When they exceed the sizes more than it was expected from visual examination, the probability increases that the observable range concerns a following trend to a bigger on scale. It can lead to destructive errors of a relativity of a trend in which items are executed, being based on models, longer or short, than time taken away for the bargain.

All models should be evaluated in a context of this relativity of a trend. Existence of any range depends on a considered time scale. For example, the market can show a strong bull course on the week schedule, bear on day and intense model of continuation on 5-minute bars, and all at the same time.

Usual forms:

Search the acquaintance anti trend parallelogram inserted between strong trend pushes. These ranges of continuation should not be finished more than for 15-20 bars. If it so, observe for coming of parallel lines on following fluctuation.

The pendants narrowed to top against a trend. End time like flags and expansion of bars against a trend about top signals about a possible turn.

Horizontal support and resistance allow a favorable swing-trading in process of model development. Expect break as soon as 3rd blow, apparently, falls short.

There are really a lot of forex strategies that you can you in the forex market and they are all different; any way it is all depends on you of what strategy you will use in your trading and what will be better for your own forex trading system.

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