Flag Patterns

Flag patterns are trend continuation patterns traders use for technical analysis and future price movement prediction. They are created mostly when the market price is ranging or in consolidation mode. Flags signify the continuation of the immediate market trend.

However, we have two types of flag patterns and these are the Bear flag and the Bull flag. The flag is the ranging or consolidating stage of the market price structure where buyers/bulls or sellers/bears fight for control. This flag formation forms in an orderly or diagonally symmetric pull-back structure.

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FLAG PATTERNS

USDCHF 1HR CHART 15TH APR 2019 (MON 22:15 GMT)

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USDJPY 4HR CHART POSSIBLE FLAG PATTERN BREAKOUT 13TH MAR 2019 (WED 19:10 GMT)

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EURJPY 4HR CHART POSSIBLE FLAG PATTERN BREAKOUT 13TH MAR 2019 (WED 08:35 GMT)

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GBPJPY DAILY CHART POSSIBLE FLAG PATTERN FORMATION 9TH FEB 2019 (SAT 16:14 GMT)

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USDJPY 4HR CHART POSSIBLE FLAG PATTERN FORMATION 9TH FEB 2019 (SAT 14:43 GMT)

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GBPCHF DAILY CHART POSSIBLE FLAG PATTERN FORMATION 9TH FEB 2019 (SAT 13:28 GMT)

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GBPCHF 4HR CHART FLAG PATTERN 6TH FEB 2019 (TUE 07:58 GMT)

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EURGBP 4HR CHART FLAG PATTERN 6TH FEB 2019 (TUE 06:46 GMT)

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GBPUSD 4HR CHART FLAG PATTERN 6TH FEB 2019 (TUE 06:30 GMT)

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AUDNZD 4HR CHART FLAG PATTERN 19TH JAN 2019 (SAT 21:33 GMT)

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USDCHF DAILY CHART FLAG PATTERN 19TH JAN 2019 (SAT 21:24 GMT)

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USDCAD DAILY CHART FLAG PATTERN 19TH JAN 2019 (SAT 16:30 GMT)

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NZDUSD 4HR CHART FLAG PATTERN 13TH JAN 2019 (SUN 23:25 GMT)

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CHFJPY 4HR CHART FLAG PATTERN 13TH JAN 2019 (SUN 23:17 GMT)

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GBPCHF 4HR CHART FLAG PATTERN 13TH JAN 2019 (SUN 22:59 GMT)

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EURCHF 4HR CHART FLAG PATTERN 13TH JAN 2019 (SUN 22:47 GMT)

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EURAUD DAILY CHART FLAG PATTERN 13TH JAN 2019 (SUN 22:41 GMT)

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EURGBP DAILY CHART FLAG PATTERN 13TH JAN 2019 (SUN 22:36 GMT)

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USDCHF 4HR CHART FLAG PATTERN 13TH JAN 2019 (SUN 22:19 GMT)

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Bear flag pattern

The Bear flag pattern develops in a bearish trend or when a bearish trend is about to be formed and when sellers/bears are in control. In the image below, the initial bearish flagpole (length a) is normally characterized by an impulsive bearish price move before a narrow consolidation stage.

The bear flag pattern also shows a market sentiment where the market supply is more than the market demand. Length a is usually equals to length b. Traders will sell as the price breakout of the flag, with stop-loss placed a few pips above the top of the narrow price range. Take profit for the bearish flag trade is usually placed at point b (same distance as the flagpole a).

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Bull flag pattern

The Bull flag pattern forms mostly in a bullish trend or when a bullish trend is about to be formed and when buyers/bulls are in control of the market. In the image below, the initial bullish flagpole (length a) is normally characterized by an impulsive bullish price move before a narrow consolidation stage.

The bull flag pattern shows a market sentiment where the market demand is more than the market supply. Length a is usually equals to length b. Traders will buy as the price breakout of the flag, with stop-loss placed a few pips below the bottom of the narrow price range. Take profit for the bullish flag trade is usually placed at point b (same distance as the flagpole a).

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To identify the flag formation, the price needs to move in a narrow range between two parallel lines in a slanting manner (tilted rectangle). (Traders often confuse Flag pattern with Rectangular Pattern, as the latter moves in a horizontal direction, while the two parallel lines are drawn horizontally and the range is wider).

It is essential that traders wait patiently for the flag to form completely.

AUDUSD DAILY CHART (1ST JAN 2018 20:03 GMT)

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USDCHF 4HR CHART FLAG PATTERNS

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AUDUSD DAILY CHART FLAG PATTERNS

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NZDUSD DAILY CHART FLAG PATTERNS

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