What is a flag pattern in technical analysis?

A flag pattern, in technical analysis, is a price chart characterized by a sharp countertrend (the flag) succeeding a short-lived trend (the flag pole). Flag patterns are accompanied by representative volume indicators as well as price action. Flag patterns signify trend reversals or breakouts after a period of consolidation.

Is the flag pattern a good chart pattern?

The Flag pattern is a great chart pattern that you MUST add to your forex trading arsenal! You must have found yourself in this situation… You waited for a pullback that never came… The market only moved higher without you… I know it sucks! However, you can easily fix this problem. In this article, I will teach you how to trade the Flag pattern.

What does a flag mean on a price chart?

A flag is a price pattern used in technical analysis that, over shorter time frames, moves counter to the prevailing price trend observed across a longer period on a price chart. It is named because of the way it reminds one of a flag atop a flagpole. What does a bull flag look like?

How to trade a flag pattern?

The Flag pattern gives two lines running parallel to each other. -The best time to trade the Flag pattern is after a breakout. The breakout acts as a confirmation of the Flag pattern. -You can also trade the Flag pattern when it is showing a strong trending market. -Always place a stop loss order at the lowest point of the Flag pattern.