Forecasting Downtrend Continuations

Like the patterns described in the preceding pages of this chapter, the bearish three-stick patterns that foreshadow the continuation of a downtrend are mirror images of their bullish counterparts, which you can read about in Chapter 9. The patterns in this section are useful, but more so as confirmations for trades that are already on than as inspiration to initiate a new trading position.

You can initiate new positions by using bearish three-stick continuation patterns, but keep in mind that with trending signals there's already been some price movement in the direction you'll be trading (sometimes considerable price movement). Trends are your friends, but they don't last forever.

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