Bull Flag / Bear Flag

What is a Bull Flag?

A bull flag is a continuation pattern that forms after a sharp upward move (the "pole"). Price then consolidates in a slight downward or sideways channel (the "flag") before breaking out to continue higher.

What is a Bear Flag?

The mirror image: a sharp drop followed by a slight upward or sideways consolidation before breaking down further.

How to trade flags

• Entry: buy the breakout above the flag's upper trendline (bull flag) or short the breakdown below the lower trendline (bear flag)
• Target: measure the pole length and project it from the breakout point
• Stop loss: just below the flag's low (bull flag) or above the flag's high (bear flag)
• Volume: should decrease during the flag and increase on the breakout