How to Trade Stocks Using Flag Pattern

How to Trade Stocks Using Flag Pattern

Flags

it’s short-term Trend continuation patterns that mark a small consolidation before the previous move resumes

Trend:

To be considered a continuation pattern, there should be evidence of a prior trend. Flags require evidence of a sharp advance or decline on heavy volume.

Flagpole:

The sharp advance (or decline) that forms the flagpole

Flag:

 A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up

Break:

 For a bullish flag or pennant, a break above resistance signals that the previous advance has resumed. For a bearish flag or pennant, a break below support signals that the previous decline has resumed

Target:

you can measure length of flag pole and add the same to break out point to derive the target

Entry:

When flag resistance broken out

Exit:

Keep trailing Sl with EMA(21) as shown below

 

Flag in Down Trend

 

how to trade stocks using flag pattern

 

Flag in Uptrend:

how to trade stocks using flag pattern

 

 

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