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Flag

The Flag pattern forms after a strong trend, allowing the market to rest before continuing the prior trend.

PoleFLAGFlag: Strong move → Consolidate flag shape → Continue

Pattern Details

Category

continuation

Success Rate

85%

Average Move

+12%

Duration

1-3 weeks

Pattern Structure

Pattern Structure
Key components that define this chart pattern
  • 1
    Flagpole: Strong initial trend
  • 2
    Flag portion: Short pullback, counter to trend
  • 3
    Breakout: Continuation of prior trend

Trading Rules

Trading Rules
Essential rules for trading this pattern successfully
  • ✓
    Enter position when price breaks out of flag portion
  • ✓
    Volume typically low during flag formation
  • ✓
    Target = Length of flagpole
  • ✓
    Stop loss placed on opposite side of flag
Trading Tips
  • Flag should not extend beyond 20 sessions
  • Volume increases on breakout
  • Bull flag in downtrend = continuation pattern

Statistics

Breakout Statistics
Bullish Breakout67%
Bearish Breakout85%
Performance Metrics
Average Rise+12%
Average Decline-12%
Pullback Rate6%