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Flag Pattern Tutorial

Bull and bear flag patterns provide signals about future market movement. [1] A bull flag forms after a strong upward move and signals further gains, taking the shape of a horizontal or downward channel with a preceding vertical rally. [2] To trade bull flags, identify the consolidation flag after the pole and enter on a break above the upper trendline, confirmed by volume and indicators. [3] A bear flag is the opposite, forming in a downtrend and signaling further losses, with a downward flag after an upside pole.

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MOHD TARMIZI
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81 views5 pages

Flag Pattern Tutorial

Bull and bear flag patterns provide signals about future market movement. [1] A bull flag forms after a strong upward move and signals further gains, taking the shape of a horizontal or downward channel with a preceding vertical rally. [2] To trade bull flags, identify the consolidation flag after the pole and enter on a break above the upper trendline, confirmed by volume and indicators. [3] A bear flag is the opposite, forming in a downtrend and signaling further losses, with a downward flag after an upside pole.

Uploaded by

MOHD TARMIZI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Flag Pattern Tutorial

Bull & Bear Flag chart patterns Tutorial!

Bull Flag : A bull flag forms in bullish trending market, After a strong bullish movement when this pattern forms it signals the market is
likely to move more higher. Bull flag pattern much similarly looks like a horizontal parallel channel or downward parallel channel along
with a strong bullish vertical rally; when we draw the pattern it looks like flag on a pole, that's why they are called bull flags.
How to identify and Trade Bull Flags : - It is easy to identify a bull flag you just need to look for a Bullish Vertical Rally or Trend which is
Pole of the Flag then identify the consolidation which will look like either horizontal channel or downward channel which will be the Flag.
After identifying the pattern you can enter at the bottom of the flag or you can enter when price breaks the upper trendline of the flag
which is more safe.
The breakout may also be a fakeout that's why we will take help of Volume and RSI Indicator to confirm the breakout. As shown on the
below example you can see when price breaked the uppper trend of the flag the Trend drawn on the RSI was also broke and
the Volume was high.
(https://www.tradingview.com/x/sqyceAld/)

(*Key things to know : If the retracement measured from the vertical rally or Flag Pole retrace more than 50% the pattern becomes weak
and it may not be a Flag Pattern but sometimes it stays valid if it breakouts above the uppertrend of the flag.)

Bear Flag : Bear Flag is just the opposite of the Bull Flag Pattern. A bear Flag forms in bearish trending market. Bear Flag pattern signals
the market is likely to drop more lower. You need to identify Bear Flag in bearish trend when the price of a financial asset drops then if
the price forms a horizontal channel or upward channel which will look like a inverted flag whose flag pole will be upside and the flag will
be downside.
Example : BTCUSD
Example : Bear Flag
Example : Bear Flag (Horizontal Channel)

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