What is a Bull/Bear Flag?
These patterns are taken directly from classical charting (Schabacker, Edwards & Magee, etc.) and have withstood the test of time. Flags are a continuation pattern in a trending market. They are found on all time frames, all markets, and offer one of the better risk reward ratios for trade setups. A flag formation should be preceded by a “pole” or initial momentum move in the direction of the trend. The ensuing consolidation tends to be relatively shallow. Continuation patterns are much shorter than reversal patterns. The longer a “flag” goes sideways, the greater the odds that it will turn into a reversal pattern as opposed to leading to a new leg in the direction of the trend.
