A Guide to Trading Bullish and Bearish Pennants IG International

Chart patterns Understand how to read the charts like a pro trader. They account for unseen hazards such as driveways, intersections, and how to trade bearish engulf forex other places where another vehicle may enter the road ahead. The no passing zone sign is meant to mark where drivers cannot safely pass.

  • Stop losses are located above the pennant’s upper bounds, and profit targets are placed below the pennant.
  • The pennon is a flag resembling the guidon in shape, but only half the size.
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  • By signing up as a member you acknowledge that we are not providing financial advice and that you are making the decision on the trades you place in the markets.
  • Pennants have been carried by men-of-war from the earliest times, prior to 1653 at the yard-arm, but since that date at the maintopgallant masthead.

A chart formation is a recognizable pattern that occurs on a financial chart. How the pattern performed in the past provides insights when the pattern appears again. Full BioSuzanne is a content marketer, writer, and fact-checker. She holds a Bachelor of Science in Finance degree from Bridgewater State University and helps develop content strategies for financial brands.

Origin of pennant

Get free access to our live streams and our market analysts will show you exactly how to read the charts. Trading analysts Meet the market analyst team that will be providing you with the best trading knowledge. Make Bitcoin Lifestyle App Review Is It Safe Or A Scam sure to obey all warning signs as they indicate a special situation or hazard that lies ahead. No passing zone signs indicate that you are entering a no passing zone so make sure not to try and pass other vehicles.

define pennant

Linking two pennants requires 7 cells and produces 6 cells of garbage whereas linking two binomial trees requires only 6 cells producing 3 cells of garbage. Note that the pennants resulting from the binary tree vantagefx rebate must be reversed beforehand. After losing to Atlanta in last year’s World Series, Houston is 7-0 this postseason, earning the fifth pennant in franchise history and another chance at its second championship.

How to trade bullish and bearish pennants with IG

We said earlier that the bear pennant is a continuation pattern as it tends to help the existing downtrend to continue. Arguably, the biggest strength of a bear pennant is that it helps traders identify the stage at which the trend is currently in. Therefore, the future of ui the pennant makes life easier for traders, as it provides them with precisely defined trading levels, thanks to the flagpole and pennant. In this blog post we look at how the bearish pennant works, its structure, strengths and weaknesses.

Pennants are continuation patterns where a period of consolidation is followed by a breakout used in technical analysis. James Chen, CMT is an expert trader, investment adviser, and global market strategist. A bearish flag pattern consists of a flag pole followed by a parallel trading range. For the pennant, a period of consolidation follows the flag pole.

define pennant

«1. A long narrow flag, with cleft end, flying from the mast-heads of ships, carried in battle, etc.» Among the fittings of the ship that took Beauchamp, Earl of Warwick, to France in the reign of Henry VII was a «great streamer for the ship 40 yards in length 8 yards (7.3 m) in breadth». Pennon-style flags were one of the principal three varieties of flags carried during the Middle Ages . The pennon is a flag resembling the guidon in shape, but only half the size. It does not contain any coat of arms, but only crests, mottos and heraldic and ornamental devices. A pennon, also known as a pennant or pendant, is a long narrow flag which is larger at the hoist than at the fly.

What is meaning of use of Substitues flag and Alphabetical Flag or Numerical Pennant ?

This makes the bullish pennant pattern particularly sought after, as it can offer an early indication of significant upward price action. A bullish pennant is a technical trading pattern that indicates the impending continuation of a strong upward price move. They’re formed when a market makes an extensive move higher, then pauses and consolidates between converging support and resistance lines. We said earlier that you are advised to wait for a breakout to take place before entering the long trade to protect yourself from a potential reversal. Remember that until the breakout takes place, the bear pennant is still in “draft” mode and the price action can always reverse the trend and break out higher.

The narrow pennant, or long pennant is a long, narrow piece of bunting, carried at the masthead of a government vessel in commission. The board pennant is an oblong, nearly square flag, carried at the masthead of a commodore’s vessel. A cup and handle is a bullish technical price pattern that appears in the shape of a handled cup on a price chart. A symmetrical triangle is a chart pattern characterized by two converging trendlines connecting a series of sequential peaks and troughs.

define pennant

In the picture below, you can see how a flag’s shape differs from the pennant. Here are the key takeaways you need to consider when trading the bear pennant pattern. Although bear pennant patterns are reliable, they do have a few drawbacks. To define pennant, draw a line that connects the upper bounds of price action and a line to connect the lower bounds. This article will teach you to recognize and trade currency pairs using the bear pennant chart pattern. Turn Pennant is used on warships, alone or in short sets to communicate various unclassified messages.


Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.

In the above example, the stock creates a pennant when it breaks out, experiences a period of consolidation, and then breaks out higher. The upper trend line resistance trend line of the pennant also corresponds to reaction highs. Traders could have watched for a breakout from these levels as a buying opportunity and profited from the subsequent breakout. The price target for pennants is often established by applying the initial flagpole’s height to the point at which the price breaks out from the pennant. The stop-loss level is often set at the lowest point of the pennant pattern, since a breakdown from these levels would invalidate the pattern and could mark the beginning of a longer-term reversal.

Secondly, a price consolidation that forms a roughly symmetrical triangle with its support and resistance lines. An ascending triangle is a chart pattern used in technical analysis created by a horizontal and rising trendline. The pattern is considered a continuation pattern, with the breakout from the pattern typically occurring in the direction of the overall trend.

Similar to a bear flag, the consolidation phase shouldn’t surpass the 50% Fibonacci retracement of the prior leg lower . A pullback that extends below 50% signals that the downtrend is not as strong as it should be. Hence, a strong bear pennant corrects to around 38.2% before breaking the lower trend line. Profit targets are typically aligned according to risk/reward ratios. However, no matter how you place a profit target, it will be below the bear pennant pattern on your price chart.

There are 2 schools of thought out there with regards to Nautical pennants. Either way, though, the pennant is talking to the glass and both are telling us a lot about the relationship between these two characters. Noun sports The winning of a competition, represented by a flag. Noun A flag normally used by naval vessels to represent a special condition. Noun A flag that symbolizes the championship of a league, especially a professional baseball league. In the Netherlands, an orange pennon is always used on the King’s Day and several other national holidays related the House of Orange.

Most Profitable Forex Pair Best Forex Pairs 2022


This makes it unsuitable for beginner to intermediate and even risk-averse currency traders. Although EUR/GBP is the exchange rate between two of the largest world economies – the Eurozone and the UK – it’s still only a minor pair because it doesn’t include the US dollar. USD/SGD is the exchange rate between the US dollar and the Singaporean dollar, also called the ‘Sing’. It tells traders how many Sings are needed do buy a single US dollar. Market volatility, volume, and system availability may delay trade executions. Price can change quickly in fast market conditions, resulting in an execution price different from the price available at the time order is submitted.

The Pros and Cons of Using a Robot to Trade the Forex Market – The Tribune India

The Pros and Cons of Using a Robot to Trade the Forex Market.

Posted: Tue, 14 Mar 2023 07:00:00 GMT [source]

Next, compare the account offerings, trading platforms, tools, and investment research provided by each broker. Alongside nearly 10,000 CFDs, CMC Markets offers the most tradeable currency pairs, with 158 pairs that can be quoted both ways (i.e. EUR/USD or USD/EUR), which comes to a total of 316 pairs. You might be looking for the most cost-effective forex brokers. Or maybe you are a beginner forex trader who is just getting started. This important currency pair, which consists of the US dollar and the Swiss franc, is typically regarded as a secure investment during times of political and economic unrest.

USD/CHF – (US Dollar/Swiss Franc)

I’m new working on my demo a/c and I didnt know which currency to trade. Very useful information that will permit me increase the trading knowledge I need. The concept of doubling the risk is something I was not aware of. People have said alot about this great article of yours, but i will also thank you, if i have thousand tongue i use all of it to say Big thank you. The USDCHF is negatively correlated to the EURUSD, so if the EURUSD is moving higher the USDCHF is most likely moving lower. Now, there are some things we need to discuss about the “majors” before we move on to discuss the “crosses”.

Before we go into this in more detail, it is worth noting the generic features of forex trading. If you’re interested in trading foreign exchange, you’ll need to understand the forex market, the global economy, the world’s currencies and their relationships to one another. The EURUSD is the most traded currency pair due to its widened appeal with the EUR and USD. Your first Forex trade should come after careful education, watching market data, and choosing a reputable broker.

They buy it when it starts to rise and sell it when it starts to fall, so they gain a difference. But the volatility notwithstanding, it still makes it to our list of best pairs to trade in forex – for high-risk traders. With volatility and high-risk tolerance comes the ability to make significant gains in either market direction. Also known as ‘Aussie,’ the AUD/USD joins our list of best currency pairs with tight spreads.

How to trade currency forex?

With multiple altcoins breaking out this week thanks to Bitcoin and Ethereum’s lead, it seems like profits might be on the way. GBP/USD is short for the British pound and U.S. dollar currency pair, or cross, showing how many U.S. dollars are needed to buy one British pound . Investopedia requires writers to use primary sources to support their work.

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Best Forex Brokers in the UK for 2022, Top 10 UK Broker Reviews.

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Prior to making any decisions, carefully assess your financial situation and determine whether you can afford the potential risk of losing your money. With this comprehensive list of 28 major forex pairs, you’ll know exactly which pairs to watch, trade and invest in. Forex pairs are just pairs of two currencies that are exchanged, one for the other, in a Forex trade.

Which is the safest currency pair?

Also, since these pairs are quite stable, scalpers can take advantage of them in order to achieve consecutive, albeit conservative, profits. The last pair on our list of the most popular pairs to trade is the Australian Dollar and the USD. This currency pair is commonly referred to as the “aussie.” The pair negatively correlates to the USD/CAD, USD/CHF, and the USD/JPY. As the world’s most dominant reserve currency and as the currency of the world’s largest economy, the United States Dollar is the most widely traded currency in the world. The European Union Euro is second in dominance and therefore makes this pair the most formidable in terms of liquidity and taking up the largest chunk of the market’s action.

First of all, you’ll need a Forex broker to help you put in your trades. Whether you plan on making daily Forex trades or trading every once in a while, you need a qualified broker to help you place trades in the Forex markets. Make sure you check the broker’s fees, if they allow Forex trading in your country, and what type of membership or account minimum is required to open a brokerage account. Strategies that involve profiting from small price movements, such as scalping and automated trading programmes, also may outperform in the Asian markets. As there is less activity, there is less chance of missing a trade on a small fluctuation. This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments.

What makes the best forex pair to trade?

It makes a lot of sense for a trader to restrict himself to a few pairs that are not only liquid but also have some degree of predictable market pice action that will allow for simple analysis. Now I’m at least looking only at 10 currency pairs with well organized chart area. It means you need to be careful when making your trading decisions so as to not double up your risk or trade against a position you currently have open.

  • The most important factors are economic data releases, geopolitical events, and central bank announcements.
  • If you’re a fan of mobile platforms – or trading forex on the go – see our picks for best forex trading apps here.
  • Traders must pay attention to seasonal trends when trading the EUR/USD.

With a wide https://forex-world.net/ of forex brokers comes a wide variety of features and specialties. To help you find the best forex broker for what you’re looking for, we’ve listed our top picks for some of the most sought-after features in the forex industry. If you’re a fan of mobile platforms – or trading forex on the go – see our picks for best forex trading apps here. What can be considered the largest forex broker may vary depending on the time period used to measure size. Important factors to consider when gauging the size of a forex broker are the assets under management, number of clients, and market capitalization . The specific amount of money you’ll need for trading forex will depend on multiple factors, such as your personal financial situation, your trading goals, and your tolerance for risk.

For example, if the EUR/USD pair ended the US session close to thetechnical resistance, it could move lower in the Asian markets overnight. However, trades should always conduct their own due diligence to identify such signals. For those looking for more volatility, the best currency pairs to trade at night may be Asian and Oceanian cross rates that do not include USD, such as the AUD/NZD, AUD/JPY or NZD/JPY. As their regular business hours are during the UK night session, these currency pairs fluctuate based on economic news and other developments coming from Asia and Oceania regions.

A currency pair consists of two currency abbreviations, followed by the value of the «base» currency which is expressed in the «quote» currency . Yes, you guessed right – the Foreign Exchange Market , where all trade is between currency pairs of two different countries. It is essential to be aware of the technical and fundamental predictability of currency pairs – and watch their evolution as well. Forex trading is never a one-way street, and knowing when to drop a currency pair that has lost its predictability is critical. Moreover, the Aussie is the best «risk currency,» enjoying a strong correlation with stock markets. It has recently been less correlated to Chinese data – and that is good news, as figures from the world’s second-largest economy tend to cause confusion.

foreign exchange market

PayPal has grown in popularity as a way to fund forex trading accounts, due to its extensive international presence and wide range of supported currencies. Head over to our guide to the best PayPal forex brokers to learn more about using PayPal to fund your account, and to see our list of the best forex brokers that accept PayPal. A good currency pair has liquidity and volume, which means a good money flow in the market for the currency pairs you are trading. Money flow equals price movement and, as you are trying to make money from the price fluctuations, this helps you enter and exit a Forex trade with a profit. Last on our list of best pairs to trade in forex is a leading minor exchange – the EUR/JPY currency cross. Like EUR/GBP and EUR/JPY, the pair that pits Euros against the Japanese Yen is relatively popular and has been listed with some of the most popular FX brokerages.

Those trading the currency pair follow European Central Bank releases, European employment rates, and import/export data. Switzerland’s GDP data, inflation rates, and employment rates can affect the Swiss currency thus should be closely monitored by traders. Unlike the currency pairs mentioned above, GBP/JPY doesn’t include the US dollar. It is highly influenced by events taking place in Japan and the UK. The pair can develop strong trends allowing traders to gain many pips on a single position.

Most Popular Currency Pairs to Trade for Beginners

Enjoy a suite of powerful, industry-leading platforms and get the popular charting program TradingView for free. For instance, if the pound is rising against the dollar, you might buy GBP/USD. When you buy this pair, you’re buying pound sterling by selling the US dollar . Then, if the pound continues to outpace the dollar, you can sell the pair to exchange your GBP back for USD and keep the difference as profit.


The MetaTrader trading platforms are widely regarding as some of the best Forex trading platforms. These platforms are the most used in the world and come equipped with a whole range of useful technical indicators to help with chart analysis. All traders need to keep track of the different levels of activity throughout the trading sessions. Next, I’m going to briefly discuss these periods and the times that traders generally consider the best and worst times to trade.

As Forex trading is risky, you should try it first on a Demo account with virtual currency so you can practice before risking your own capital. It is during these hours that traders seem to find the best opportunities. The TOTH – the first and the last five minutes of each hour – can also experience volatility and sharp market movements.

So, volatility might be a benefit to the Forex trader, but proceed with caution. When looking for Forex pairs to trade, it’s important to check out those countries’ geopolitical, economic, financial, and political happenings. You’ll essentially be investing in a country when you buy a foreign currency, and you want to make sure you choose the best currency combinations you can. Another aspect of trading at night is that some currency pairs can have a smaller margin requirement than the pairs that are most active during the European and North American sessions.


Nial Fuller is a professional trader, author & coach who is considered ‘The Authority’ on Price Action Trading. He has taught over 25,000 students via his Price Action Trading Course since 2008. Reink Media Group is compensated if you access certain of the products or services offered by eToro USA LLC and/or eToro USA Securities Inc.

We also examine their liquidity, prices, and average spreads on major forex brokerages. We also check their price correction with other currency crosses and assets in the financial markets. Through this guide, we hope to help you make informed trading decisions by introducing you to what we consider the best currency pairs to trade in forex in 2023. And to achieve this, we analyze and help you understand the most popular forex pairs. We will tell you about the most volatile currency crosses and how they correlate with other currency pairs and financial assets. To identify the best forex trading pairs for this week, traders need to look at the economic calendar for the week ahead.

This is why many traders prefer to trade major currency pairs (EUR/USD, GBP/USD, USD/JPY, USD/CHF, AUD/USD, GBP/JPY, and USD/CAD). This group of currencies is highly liquid and, as a result, unlikely to experience significant unexpected price moves. Some minor currency pairs can become a good alternative (NZD/USD, EUR/CHF). Among the exotic currency pairs, USD/CNY offers some degree of price stability due to the strong positions of the Chinese economy. There goes everything you need to know about the best currency pairs to trade in forex in 2023.

This way, you won’t have to constantly look at your watch or measure the Forex best pairs to trade session duration to determine the most active trading time for the selected pair. It is often argued that the top traded pairs are also the most predictable ones. However, this fact is not supported and is based mainly on guesses. These are the pairs we think best to trade, and we wrote why on each pair, you have to check if it’s fit for you as a trader. It is easier to read these five Forex currencies because they’re either ranging or trending. When a trend begins, the price action tends to move for a significant period.

The USD/CHF (US Dollar/Swiss Franc), nicknamed ‘Swissy’, derives its popularity from the Swiss Franc’s safe-haven status. When risk/volatility enters the market, traders bid up the Swiss Franc because the Swiss economy is seen to have lower risk. The popularity of the EUR/USD ensures that it trades at tight spreads.