Japanese candlesticks - Continuation patterns

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What is a Japanese candlesticks continuation pattern?

Continuation patterns in Japanese candlesticks forecast continuation of the current trend. With a bullish trend, a continuation pattern gives a buying signal if a resistance line has just been broken or if a rebound has already started in a support area. On the other hand, with a bearish trend, a continuation pattern gives a sales signal if a support line has just been broken or if a correction has already begun in a resistance zone. Continuation patterns in Japanese candlesticks should only be considered in the vicinity of strategic areas (support and resistancelines of chart patterns, technical indicator lines, etc.).

It should be noted that these continuation patterns have a much higher success rate than reversal patterns with an average success rate of between 60 and 70%. Of course, some Japanese candlestick charts are more relevant than others. However, they are quite a long way from the success rates of chart patterns. This is why it is important to carry out a more detailed technical analysis and not only to open a position based on detecting a continuation pattern with Japanese candlesticks. It is important to combine the buy/sell signals with those given by more traditional technical analysis (chart patterns, resistance and support lines, technical indicators, etc.).

Japanese candlestick continuation patterns are, above all, a way to improve the quality of your signals by avoiding some false signals and optimizing your entry points.