{"id":9636,"date":"2022-10-12T08:26:28","date_gmt":"2022-10-12T08:26:28","guid":{"rendered":"https:\/\/mdr.foobrdigital.com\/?p=9636"},"modified":"2022-10-12T08:26:28","modified_gmt":"2022-10-12T08:26:28","slug":"how-to-trade-bearish-and-bullish-pennants","status":"publish","type":"post","link":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/2022\/10\/12\/how-to-trade-bearish-and-bullish-pennants\/","title":{"rendered":"How to Trade Bearish and Bullish Pennants"},"content":{"rendered":"\n<p>Similar to rectangles, pennants are continuation chart patterns formed after strong moves.<\/p>\n\n\n\n<p>After a big upward or downward move, buyers or sellers usually pause to catch their breath before taking the pair further in the same direction.<\/p>\n\n\n\n<p>Because of this,&nbsp;<strong>the price usually consolidates and forms a tiny symmetrical triangle, which is called a pennant<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2011\/01\/pennant.png\" alt=\"Pennant\" class=\"wp-image-105999\"\/><\/figure>\n\n\n\n<p>While the price is still consolidating, more buyers or sellers usually decide to jump in on the strong move, forcing the price to bust out of the pennant formation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Bearish Pennants<\/h2>\n\n\n\n<p>A&nbsp;<strong>bearish pennant<\/strong>&nbsp;is formed during a steep, almost vertical, downtrend.<\/p>\n\n\n\n<p>After that sharp drop in price, some sellers close their positions while other sellers decide to join the trend, making the price consolidate for a bit.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade7-bearish-pennant-before.png\" alt=\"Bearish Pennant\" title=\"Bearish Pennant\"\/><\/figure>\n\n\n\n<p>As soon as enough sellers jump in, the price breaks below the bottom of the pennant and continues to move down.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade7-bearish-pennant-after.png\" alt=\"Forex Bearish Pennant Breakdown\" title=\"Forex Bearish Pennant Breakdown\"\/><\/figure>\n\n\n\n<p>As you can see, the drop resumed after the price made a breakout to the bottom.<\/p>\n\n\n\n<p>To trade this chart pattern, we\u2019d put a short order at the bottom of the pennant with a stop loss above the pennant.<\/p>\n\n\n\n<p>That way, we\u2019d be out of the trade right away in case the breakdown was a\u00a0fakeout.<\/p>\n\n\n\n<p>Unlike the other chart patterns wherein the size of the next move is approximately the height of the formation, pennants signal much stronger moves.<\/p>\n\n\n\n<p>Usually, the&nbsp;<em>height<\/em>&nbsp;of the earlier move (also known as the mast) is used to estimate the size of the breakout move.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Bullish Pennant<\/h2>\n\n\n\n<p><strong>Bullish pennants<\/strong>, just like its name suggests, signals that bulls are about to go a-chargin\u2019 again.<\/p>\n\n\n\n<p>This means that the sharp climb in price would resume after that brief period of consolidation when bulls gather enough energy to take the price higher again.<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade7-bullish-pennant-before.png\" alt=\"Bullish Pennant\" title=\"Bullish Pennant\"\/><\/figure>\n\n\n\n<p>In this example, the price made a sharp vertical climb before taking a breather. I can hear the bulls stomping and revving up for another run!<\/p>\n\n\n\n<figure class=\"wp-block-image aligncenter\"><img decoding=\"async\" src=\"https:\/\/bpcdn.co\/images\/2016\/05\/grade7-bullish-pennant-after.png\" alt=\"Forex Bullish Pennant Breakout\" title=\"Forex Bullish Pennant Breakout\"\/><\/figure>\n\n\n\n<p>Just like we predicted, the price made another strong move upwards after the breakout.<\/p>\n\n\n\n<p>To play this, we\u2019d place our long order above the pennant and our stop below the bottom of the pennant to avoid fakeouts.<\/p>\n\n\n\n<p>Like we discussed earlier, the size of the breakout move is around the height of the mast (or the size of the earlier move).<\/p>\n\n\n\n<p>You see, pennants may be small in size but they could signal huge price moves so don\u2019t underestimate \u2019em!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Similar to rectangles, pennants are continuation chart patterns formed after strong moves. After a big upward or downward move, buyers or sellers usually pause to catch their breath before taking the pair further in the same direction. Because of this,&nbsp;the price usually consolidates and forms a tiny symmetrical triangle, which is called a pennant. While [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[807],"tags":[],"_links":{"self":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9636"}],"collection":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/comments?post=9636"}],"version-history":[{"count":0,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/posts\/9636\/revisions"}],"wp:attachment":[{"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/media?parent=9636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/categories?post=9636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mudassirbackup.infinitycodestudio.com\/index.php\/wp-json\/wp\/v2\/tags?post=9636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}