What is the pole of a pattern?
In , use various patterns to make sense of data and identify possible opportunities.
With and patterns (both have a and version), one particular element of the pattern is known as ‘the pole of the pattern’.
The pole in flag patterns
A flag pattern is a continuation pattern consisting of three main elements: a strong up or (the pole of the patternWhat is the pole of a pattern? In technical analysis, trad... More), a consolidation phase (the rectangular flag shape itself) and then a continuation of the original trendWhat is a market trend in trading? A market trend is the ten... More.
1) Pole of the pattern (initial uptrendWhat are uptrends in trading? When the price of an asset o... More)
2) Flag (consolidation phase)
3) Continuation of the uptrend
The chart above shows a bullish flag pattern with each element of the pattern labelled.
The initial constitutes the pole of the pattern. This is followed by a period when the price pauses and retraces slightly, forming the gently downward-sloping rectangular shape (the flag). Finally the price breaks out and continues in the direction of the original trend; this can give you an opportunity to potentially at a better priceWhat are value stocks? A value company is a company that app... More than before the flag formed.
The pole in pennant patterns
A pennantWhat is a pennant? A pennant is a triangular continuation ... More pattern is also a continuation patternWhat is a continuation pattern? A continuation pattern is ... More that consists of three main elements: a strong up or downtrendWhat is a downtrend in trading? When the price of an asset... More (the pole of the pattern), the pennant shape (which is characterised by converging trendlines forming a triangular shape) and then a continuation of the original trend.
1) Pole of the pattern (initial uptrend)
2) Pennant (consolidation phase)
3) Continuation of the uptrend
The chart above shows a bullish pennant pattern with each element of the pattern labelled.
The initial uptrend constitutes the pole of the pattern. This is followed by a period when the price consolidates, moving sideways and gradually making lower highs and higher lows – this creates the triangular flag shape known as a pennant. Finally the price breaks out and gives you the opportunity to and profit from the continuation of the original uptrend.
