Trend Continuation

Continuation means the trend was interrupted, not ended. Flags, pennants, rectangles, and inside bars are continuation shapes when they break with the trend. The structure of higher highs and higher lows, or the bearish mirror, remains in force through the pause.

A sharp move, a tighter and usually smaller counter-move, then a break back in the original direction. The pause should not break the trend's last structural low or high. If it does, you are looking at a possible reversal, not continuation.

In an uptrend, a continuation long triggers on the break of the pause, with risk under the pause. You are betting the prior rhythm resumes.

In a downtrend, a continuation short triggers on the break of a weak rally. Risk goes above that rally.

Calling a deep retracement that breaks structure a continuation, because you want the old trend back.

Continuation fails exactly when the crowd is leaning on it. A failed flag is often the start of the real reversal, so the invalidation has to be real.