How Do You Analyze Flag Pattern Chart Pattern?
How Do I Read Flag Pattern Chart Pattern?
There are two different types of gold flag patterns - bullish flag chart pattern and bearish flag chart pattern.
To trade these chart patterns one requires to learn about the technical analysis of bull flag chart pattern and bear flag chart pattern.
Bull Flag Pattern
Bull flag pattern forms what looks like a rectangle pattern with a slight downwards tilt. The rectangle is formed by two parallel lines that act as support area & resistance area for price until the price breaks out. Generally, the bull flag pattern will not be perfectly flat but it will be sloping & having a slight tilt.
The bull flag pattern is found within an up-ward trend. Bull flag pattern is a continuation chart pattern where the price retraces slightly, bull flag pattern is therefore a slight price pull back with narrow price action which has a slight downwards tilt. The buy signal is generated when the price penetrates the upper line of the bull flag pattern. The flag portion of the bull flag pattern has price highs and price lows which can be joined together by small lines which are parallel, making it look like a small channel - flag.
The bull flag pattern occurs at halfway point of a bullish upward trend & after a price break out a similar move equal to the height of the flag-pole is expected.
Analyze Bull Flag Pattern?
The bull flag pattern shown above was just a resting period as the market gathered momentum to break-out & move higher. Bull flag pattern continuation signal was confirmed when upper line of this Bull flag pattern was broken to the upside after which the price continued to move upwards.
Bear Flag Chart Pattern- How Do I Read Flag Pattern Chart Pattern?
This bear flag pattern is found in a downward trend. The bear flag chart pattern is a trend continuation pattern where the price retrace slightly with a narrow price action which has a slight upward tilt. The sell signal is generated when the price penetrates the lower line of the inverted bear flag chart pattern. The flag portion of this bear flag chart pattern has price highs and price lows which can be joined together by small lines which are parallel, giving the bear flag pattern the look of a small channel - inverted flag.
Analyze Bear Flag Pattern?
The bear flag pattern above was just a resting period for the market trend prior to more selling & resuming of the downwards trend. The continuation signal from the bear flag chart pattern was confirmed when the lower line of this bear flag chart pattern was broken to the downside after which the price moved downward.
Interpret Flag Pattern?
