Trading Identify Flag Chart Pattern

There are two different types of trading flag chart patterns - bullish flag chart pattern and bearish flag pattern.

To trade these chart patterns a trader requires to learn about the technical analysis of bullish flag chart pattern and bearish flag pattern.

Bull Flag Chart Pattern

This bull flag setup forms what looks like a rectangle. The rectangle is formed by 2 parallel lines that act as support & resistance for the price until the price breaksout. In general, the bull flag pattern will not be perfectly flat but it will be slanting.

The bull flag pattern is found within a upward trend. In this bull flag chart pattern is a continuation chart pattern where the market retraces slightly, it's therefore a slight retracement with narrow price action that has a slight downward tilt. Technical buy point is when price penetrates the upper line of the bull flag chart pattern. Flag portion has highs and lows which can be connected by small lines that are parallel, giving it what looks like a small channel.

The bull flag pattern occurs at halfway point of a bullish up-wards trend & after a breakout a similar move equal to the height of the flag-pole is expected.

Bull Flag Chart Pattern - How to Trade a Bull Flag Chart Pattern?

The bull flag chart pattern above was just a resting period as the market gathered strength to breakout & move higher. Bull flag chart pattern trading continuation signal was confirmed as a upper line of this flag chart pattern was broken to the up side.

Bear Flag Chart Pattern

This bear flag pattern is found in a downwards trend. The bear flag chart pattern is a trend continuation pattern where the price retraces slightly with a narrow price action that has a slight up-ward tilt. The technical sell point is when the price penetrates the lower line of the inverted bear flag chart pattern. The flag portion of this chart pattern has highs & lows which can be connected by small lines which are parallel, giving it what looks like a small channel.

Bear Flag Chart Pattern - How to Trade a Bear Flag Chart Pattern?

The bear flag setup above was just a resting period for the market prior to more selling. The continuation signal was confirmed as the lower line of this setup was broken to the down-side.