Flags

The flag pattern is a continuation chart formation that can see during a temporary pause in either a bullish or bearish direction. These patterns have two parallel lines that work as support and resistance point during a price consolidation phase which looks the flag with the previous upward move represent the flagpole part. The flag pattern is used to identify the possible extension of a previous price action from a point at which price has move against that same trend. The price advance could be fast, making the timing of a trade advantageous by noticing the flag pattern.

Most Used Trends of Flags Pattern

Advantages & Limitations Of Flags Pattern

The biggest advantage of the Flag patterns is the already anticipated direction. These patterns are visible at the midpoint of the trending move and that gives the trader an invaluable knowledge of a probable end point of the major trend. The height of the pole is projected from the breakout point to ascertain the target. The performance of the Flag increases dramatically if the range is tight instead of just a loose formation.