What is a forex flag pattern?

The forex flag pattern is a chart pattern that appears when a trend begins to accelerate. It consists of a few large candles in the direction of the trend and a smaller retracement thereafter. It suggests another big move in trend direction. The bullish flag occurs when the price quickly shoots up and begins consolidating.

What is a flag chart pattern?

The Flag chart pattern has a continuation potential on the Forex chart. The bull Flag pattern starts with a bullish trend called a Flag Pole, which suddenly turns into a correction inside a bearish or a horizontal channel.

How do you know if a market has a flag pattern?

One useful way to confirm a flag is to watch the market’s volume. In a bullish flag, volume should be high during the initial uptrend, then peter out as the market consolidates. Once the breakout hits, volume should spike once more. You could interpret a flag pattern as a brief pause in the middle of a sustained trend.

Can flag patterns be used as trading signals?

Flag patterns can be used as trading signals because they can help traders determine the market’s likely direction. If the market is in an uptrend, traders can look for bullish flag patterns as signals to enter into long trades. If the market is in a downtrend, traders can look for bearish flag patterns as signals to enter into short trades.