Pennats

The pennant pattern form in the middle of the complete price move, consolidating the prior move. The price change within a small symmetrical triangle that begins wide and converges to a point as the pattern forms. They appear in any market and traders use them to predict movements of proce in the future.

There are two types of pennant patterns: Bearish Pennants and Bullish Pennants

Bearish Pennants are continuation patterns that shows a pause in the movement of a price halfway through a strong downtrend. It gives traders an opportunity to go short before price decline. The bearish pennant made just after a sharp drop in price and look like a triangular flag as the price moves in consolidation, gradually making lower highs and higher lows. Bullish Pennants represent a pause in the movement of a price halfway through a strong uptrend. This allows traders to buy and made profit from the rest of the price advance.

Most Used Trends of Flags & Pennats Pattern

Advantages & Limitations Of Pennats Pattern

The biggest advantage of the pennant patterns is the already anticipated direction. Patterns are visible at the midpoint of the trending move and that gives the trader an invaluable knowledge of a probable end point of the major trend. Pennant performance increase as the absence of gap implies more tight contraction of volatility result in rapid rise in previous move.