Flag Pattern is one of the most popular chart patterns, formed by price action, which is contained within a small rectangle or a channel in the shape of a flag. Flags are short-term continuation patterns that mark a small consolidation before the previous move resumes.
What is 'Flag' Pattern?
A flag chart pattern is formed when the market consolidates in a narrow range after a sharp move. Usually a breakout from the flag is in the form of continuation of the prior trend. Flags give very high risk reward ratio which means relatively small risk and high and quick profits.
The flag pattern could be bullish or bearish pattern. Flags can be seen in any time frame but normally consist of about five to 15 price bars.
Targets: The length of the flagpole can be applied to the resistance line of the flag to estimate the advance or target area.
What is 'Flag' Pattern?
A flag chart pattern is formed when the market consolidates in a narrow range after a sharp move. Usually a breakout from the flag is in the form of continuation of the prior trend. Flags give very high risk reward ratio which means relatively small risk and high and quick profits.
The flag pattern could be bullish or bearish pattern. Flags can be seen in any time frame but normally consist of about five to 15 price bars.
Targets: The length of the flagpole can be applied to the resistance line of the flag to estimate the advance or target area.