How to Trade a Flag Pattern

There are two different types of stocks flag patterns - bullish flag chart pattern and bearish flag chart pattern.

To trade these stocks chart patterns a trader requires to learn about the technical analysis of bullish flag chart pattern and bearish flag chart pattern.

Bull Flag Trading Pattern

This bull flag chart pattern forms what looks like a rectangle. The rectangle is formed by two parallel lines that act as support and resistance for stocks price until the stocks price breaks out. Generally, the bull flag chart pattern will not be perfectly flat but it will be sloping.

The bull flag pattern is found within a Stocks upward trend. In this bull flag pattern is a continuation chart pattern where the stocks market retraces slightly, it is therefore a slight retracement with narrow stocks price action which has a slight downwards tilt. The technical buy point is when price penetrates the upper line of the bull flag pattern. The flag portion has highs and lows which can be connected by small lines which are parallel, and it looks like a small channel.

The bull flag pattern occurs at halfway point of a bullish upward stocks trend & after a breakout a similar move equal to the height of the flagpole is expected.

Bull Flag Pattern - How to Trade a Bull Flag Chart Pattern in Stocks?

The bull flag pattern above was just a resting period as the stocks market gathered strength to break out and move higher. The bull flag chart pattern continuation stock trading signal was confirmed as the upper line of this flag pattern was broken to the up side.

Bear Flag Trading Pattern

This bear flag pattern is found in a Stocks downward stock trend. The bear flag chart pattern is a trend continuation pattern where the 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 chart pattern. The flag portion of this stocks pattern has highs & lows which can be connected by small lines that are parallel, and it looks like a small channel.

Bear Flag Pattern - How to Trade a Bear Flag Chart Pattern in Stocks?

The bear flag chart pattern above was just a resting period for stocks market prior to more selling. Continuation stock signal was completed as lower line of this pattern was broken to the down-side.