What are bullish and bearish Flags?

Technical Analysis – Bullish and Bearish Flags Flags are continuation patterns that form before the market breaks a difficult level. In essence, during the formation of these patterns, the market is building energy to break through. Flags can be either bullish or bearish, and they are part of the overall trend up to that moment.

What are bearish Flags & why are they important?

Bearish flags are formations occur when the slope of the channel connecting highs and lows of consolidating prices after a significant move down is parallel and rising. The trend before the flag must be down. Why are Bullish and Bearish Flags important? Flags imply that the market cannot decide whether to break up or down.

How do you identify a bull flag and a Bear Flag pattern?

Both bearish and bullish flag patterns can be identified during strong uptrends and downtrends, respectively. Here are five steps on how you can draw a bull flag and bear flag pattern – Identify strong upward (or downward) sloping bars that are formed one after the other in a particular time frame.

How do I trade a bullish flag pattern?

The textbook strategy to trade the bullish flag pattern is to wait for a break and close above the resistance line. It’s important to see the market breaking above the resistance line with strong momentum; otherwise, the flag pattern may be part of a different and a larger price structure.