Bullish pennant in an uptrend is a strong sign indicating that the trend will continue to go up or bullish. It can be easily plotted by drawing two lines. One line is plotted based on the resistance while the second line is plotted based on the support. As a result, the two lines will intersect forming a triangle.
Once you have encountered such type of chart pattern, do not immediately place a BUY or LONG order. Entering at an early period will let you earn less amount of pips. The best way to do it is to enter your order when the current price is near the support lines. However, there's still the risk that the trend may go down. So if you only want to enter at high-probability trade then you have to wait for the breakout at the resistance line.
Below is a figure of how a trend forms a bullish pennant. It really doesn't matter how many times the trend touches the support and resistance lines. What matters is that the trend clearly form a triangle.
To give you a better and clearer example, lets take some of my previous successful trades with the bullish pennant in an uptrend:
Example 1: On this example you can see that the support line has been touched twice while on the resistance line has multiple candlestick attempts of trying to break-through. If you are going to take a closer look into the image, you will see the small-blue dot. That was my price entry-level.
Example 2: On this second example, you should already got or understood the whole idea. The resistance has been touched twice so as the support line. My entry point was again indicated by the small-blue circle dot.
Now that you have learned how to identify a bullish pennant pattern, it doesn't mean that you are ready to apply it into your real trades. Give your self some practice by applying it on a demo account. But bullish pennant pattern doesn't often occur especially when the trend is going down or at bearish direction.
So my best advise is to do 'back trading'. This is a method where you go back into the old chart of your own trading platform then try to identify every possible bullish pennant pattern that you are able to find. If you have encountered a pattern in which you are not sure if its a bullish pennant, you can ask for my help by sending a screen-shot right into my email. For those who are new, my email can be found at the bottom most part.
Once you have encountered such type of chart pattern, do not immediately place a BUY or LONG order. Entering at an early period will let you earn less amount of pips. The best way to do it is to enter your order when the current price is near the support lines. However, there's still the risk that the trend may go down. So if you only want to enter at high-probability trade then you have to wait for the breakout at the resistance line.
Below is a figure of how a trend forms a bullish pennant. It really doesn't matter how many times the trend touches the support and resistance lines. What matters is that the trend clearly form a triangle.
To give you a better and clearer example, lets take some of my previous successful trades with the bullish pennant in an uptrend:
Example 1: On this example you can see that the support line has been touched twice while on the resistance line has multiple candlestick attempts of trying to break-through. If you are going to take a closer look into the image, you will see the small-blue dot. That was my price entry-level.
Example 2: On this second example, you should already got or understood the whole idea. The resistance has been touched twice so as the support line. My entry point was again indicated by the small-blue circle dot.
Putting the Bullish Pennant Pattern into Practice
Now that you have learned how to identify a bullish pennant pattern, it doesn't mean that you are ready to apply it into your real trades. Give your self some practice by applying it on a demo account. But bullish pennant pattern doesn't often occur especially when the trend is going down or at bearish direction.
So my best advise is to do 'back trading'. This is a method where you go back into the old chart of your own trading platform then try to identify every possible bullish pennant pattern that you are able to find. If you have encountered a pattern in which you are not sure if its a bullish pennant, you can ask for my help by sending a screen-shot right into my email. For those who are new, my email can be found at the bottom most part.
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