How to Trade the Flag Stock Setup
There are 2 types of trading flag chart patterns - bullish flag chart pattern & bearish flag pattern.
To trade these chart patterns one requires to learn about the analysis of bullish flag chart pattern & bearish flag trading setup.
Bull Flag Stock Chart Setup
This bull flag chart pattern forms what resembles a rectangle. The rectangle is formed by two parallel lines that act as support & resistance for the price until the price breaks out. In general, the bull flag setup won't be perfectly flat but it will be sloping.
The bull flag chart setup is found within a upwards trend. In this bull flag chart pattern is a continuation stock chart pattern where the trading market pulls back slightly, it's therefore a slight retracement with narrow price action that has a slight downward tilt. The technical buy point is when stock price penetrates upper line of the bull flag chart pattern. Flag portion has highs & lows that can be joined by small lines that are parallel, giving it what looks like a small channel.
The bull flag chart pattern occurs at half-way point of a bullish upwards trend & after a breakout a similar move equivalent to the height of the flag-pole is expected.
Trade a Bull Flag Chart Setup?
The bull flag chart pattern above was just a resting period as the market gathered strength to break-out and move higher. Bull flag chart pattern trading continuation signal was confirmed when the upper line of this flag pattern was broken to the upward side.
Bear Flag Stock Chart Setup
This bear flag setup is found in a downwards trend. The bear flag chart pattern is a market trend continuation pattern where the price retraces slightly/a little with a narrow price action that has a slight upwards tilt. The technical sell point is when price penetrates lower line of the inverted bear flag chart pattern. The flag portion of this chart pattern has highs and lows which can be connected by small lines which are parallel, giving it what looks like a small channel.
Trade a Bear Flag Chart Setup?
The bear flag chart pattern above was just a resting period for the trading market before more selling. The continuation stock signal was completed as the lower line of this pattern was broken to the down-side.
Learn More Lessons and Tutorials & Courses:
- Charts Tool-bar Menu and How to Customize it on MetaTrader 4 Platform
- Study About Index Trade Strategies That Work
- How to Identify a Ascending Triangle Indices Pattern in Index
- How to Place Average True Range Indicator on Index Chart on MT4 Software
- Technical Analysis of Trend in Index
- Download Index Trade MetaTrader 5 for Android
- How Can You Find and Get MT4 DJI30 Index Trade Chart?
- Study How to Trade GER30 Lesson
- How to Place Bollinger Bands Indicator in Chart in Trading Software/Platform
- How to Open Live Account on MT4 Software
