How Do You Identify Flag Chart Pattern? - How Do I Analyze a Flag Pattern?
There are 2 types of forex flag chart patterns - bullish flag chart pattern and bearish flag chart pattern.
To trade these setups a trader requires to learn about the analysis of bullish flag chart pattern and bearish flag pattern setup.
Bull Flag Pattern
This bull flag pattern setup forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support and resistance for price til the price breaksout. In general, the bull flag pattern setup will not be perfectly flat but it will be sloping.
The bull flag pattern setup is found within a upward trend. In this bull flag chart pattern is a continuation chart pattern where the market retraces slightly, it is therefore a slight retracement with narrow price action which has a slight down ward tilt. The technical buy point is when the price penetrates the upper line of the bull flag chart pattern. The flag portion has highs and lows which can be connected by small lines that are parallel, and it looks like a small channel.
The bull flag pattern setup occurs at halfway point of a bullish upward trend & after a break out a similar move equivalent to the height of the flagpole is expected.
Bull Flag Chart Pattern - How Do You Trade a Bull Flag Forex Pattern?
The bull flag pattern above was just a resting period as the market gathered strength to breakout and move higher. Bull flag chart pattern continuation signal was confirmed as a upper line of this flag pattern was broken to the upside.
Bear Flag Pattern
This bear flag pattern setup is found in a downtrend. The bear flag pattern setup is a trend continuation setup where price retraces slightly with a narrow price action which has a slight upward tilt. The technical sell point is when the price penetrates the lower line of the inverted bear flag pattern. The flag portion of this chart pattern has highs and lows which can be connected by small lines which are parallel, & it looks like a small channel.
Bear Flag Chart Pattern - How Do You Trade a Bear Flag Forex Pattern?
The bear flag chart pattern above was just a resting period for market prior to more selling. The continuation signal was completed as lower line of this pattern was broken to the downside.
