Page 9 - Module 14 Pattern Formations

Module 14 – Pattern Formations

Place your profit target
Measure the initial drop in price (the pennant's pole) before the market started to consolidate. Then
place your profit target the same distance below the pennant's breakout point. If, for example, the
initial price drop was 50 pips in size, you should place your profit target 50 pips underneath your
trade entry.

Fig 4 – Example of where to
enter Stop Loss whereby
No 1 indicate Pole of the
pattern and No 2 the area
where price has broken the
lower support of the
pennant. No 3 indicates the
distance from entry to take
profit level which should be
same height as the pole.
Sell order entry marked in
orange. Stop order entry
indicated with a Red No 2
Take profit level indicated
as Green No 3

Bullish Pennant

A bullish pennant is the exact opposite of a bearish pennant.
It is a continuation pattern that marks a pause in the movement of a price halfway through a
strong uptrend, giving you an opportunity to go long and profit from the rest of the price rise. A
bullish pennant marks a pause in a price's movement, halfway down a strong uptrend. It gives you
the chance to make a long trade, hopefully profiting from a second big price rise.
Bullish pennants occur just after a sharp rise in price and resemble a triangular flag as the price
moves sideways, making gradually lower highs and higher lows. The uptrend then continues with
another similar-sized rise in price.

How to identify a bullish pennant

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