How Do I Interpret Flag Pattern Trading Pattern?
How Do I Trade Flag Pattern Trading Pattern?
There are 2 types of flag patterns - bullish flag chart pattern and bearish flag trading pattern.
To trade these patterns one requires to learn about the analysis of bull flag chart pattern and bear flag chart setup.
How Do I Interpret Flag Pattern Trading Pattern?
Bull flag chart pattern forms what looks like a rectangle pattern with a slight downward tilt. The rectangle is formed by two parallel lines that act as support level and resistance level for price until the price breaks-out. In general, the bull flag pattern will not be perfectly flat but it will be sloping & having a slight tilt.
The bull flag pattern is found within an upward trend. Bull flag pattern is a continuation setup where price retraces slightly, bull flag chart pattern is hence a slight price pull back with narrow price action which has a slight downwards tilt. The buy signal is generated when the price penetrates the upper line of the bull flag pattern. The flag portion of the bull flag chart setup has price highs and price lows which can be joined by small lines which are parallel, and it looks like a small channel - flag.
The bull flag chart setup occurs at halfway point of a bullish upward trend and after a price breakout a similar move equal to the height of the flagpole is expected.
Bull Flag Chart Setup
The bull flag chart pattern shown above was just a resting period as the market gathered momentum to break out and move higher. Bull flag chart pattern continuation trading signal was completed when the upper line of this Bull flag chart pattern was broken to the upside after which the price continued to move up-ward.
How Do I Trade Flag Pattern Trading Pattern?
This bear flag chart setup is found in a downward trend. The bear flag chart pattern is a trend continuation pattern where the price retrace slightly with a narrow price action which has a slight upward tilt. The sell signal is generated when the price penetrates the lower line of the inverted bear flag pattern. The flag portion of this bear flag chart setup has price highs and price lows which can be joined by small lines which are parallel, giving the bear flag chart pattern the look of a small channel - inverted flag.
Bear Flag Chart Setup
The bear flag chart pattern above was just a resting period for market trend prior to more selling & resuming of the downward trend. The continuation trading signal from the bear flag chart pattern was confirmed when the lower line of this bear flag chart pattern was broken to the downside after which the price moved downward.
How Do I Interpret Flag Pattern Trading Pattern?
