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Random article: Continuation patterns
As it is clear from the title, continuation patterns signal about continuation of trends in the previous direction. The main patterns of this category are represented by the figures “Flag” and “Pennant”. Flag is a good signal of continuation of a trend when sharp movement is changed to a short pause. There are three forming states of the flag: first a strong vertical movement takes place (flagpole is shown), then flag figure appears during calm down, whereupon strong movement continues in initial direction.
In measurement formula for Joe Granville indicator, close prices compared with the purpose of adding or deducting of volume, whereas Williams' indicator open and close prices are compared. Marc Chaikin compares close prices with the middle of range from minimum to maximum. The history of indicator is interesting on its own. In Larry Williams formula, Chaikin substituted open price for price of range. The reason of change was not that he considered it wrong, but that he was not able to find data on prices of opening. That time prices were taken from daily papers, which, due to some reason, stopped publishing prices of opening.
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