What is a bull flag & Bear Flag pattern?

Every bull flag and bear flag pattern is characterized by six primary traits: Flag: The area of consolidation in price action that follows and counters a preceding a sharp price movement. The retracement of the flag should not be higher than 50% compared to the flag pole.

What does a Bear Flag mean?

Bear Flag Meaning A bear flag is a technical analysis charting pattern used to predict the continuation of a bearish trend. The pattern is composed of two parts: the flag and the flagpole. The flagpole is formed by a sharp sell-off that takes place at the beginning of the pattern, and the flag is created by the period of consolidation that follows.

When do Bull flags start?

Flag patterns begin forcefully when the trend moves off the 'other' side guard or when bulls/bears become overconfident. Bull flags blindside bears owing to their complacency, as the bulls race forward with a big breakout, leading bears to panic or add to their short positions.

How do bear flag patterns work?

Bear flag patterns work in the same way as bull flag patterns, just in reverse. Every good bear flag pattern trade should be made up of three elements: Stop Loss: Most traders use the opposite side of the flag pattern as a stop-loss to protect themselves against the price moving in the other direction.