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Candlestick Charts : An introduction to using candlestick charts by Clive Lambert

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5. Continuation Patterns

Rising/Falling Three Method and gaps

Introduction

Our voyage of discovery has so far concentrated purely on patterns that suggest the market may be turning over or reversing. These are the most powerful patterns in candlesticks but they are by no means the be all and end all. There are a bunch of patterns that signal a continuation of a trend, indicating that things have taken a temporary pause for breath before continuing on their merry way. This is often a difficult thing to decide: is a market merely retracing, or are we seeing a reversal? This is why I always ask for a bit more confirmation of any reversal pattern. The old phrase “one swallow doesn’t make a summer” is quite relevant to candlestick analysis, ...

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