Forex flag pattern

Forex flag pattern

Flags can be used to analyze the foreign exchange rate or Forex. Flags may appear both in up and down trends and it indicates a continuation of the trend to be likely.

Types of flags

  • Bullish flag
  • Bearish flag

How to recognize a flag?

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  • A flag is always symmetrical, you could draw two straight lines along the flag.
  • A flag always moves in the opposite direction of the trend.
  • The flagpole is longer than the flag itself!

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Bullish flag

A bullish flag moves in the opposite direction during an uptrend. The symmetric channel is only temporary, buyers are waiting for a new attractive moment to buy.Bullish flag pattern

Bearish flag

The bearish flag can be identified in a downtrend and moves upwards. Sellers are waiting for a new attractive moment to sell.Forex flag pattern

Channels

In addition to the flags there are also channels. Channels have the same characteristics as flags. The price is stuck between two horizontal levels for a longer period. Normally, the trend will continue at the end of the channel.Bearish Flag pattern

A channel can be seen as a consolidation, it reflects a moment of indecisiveness among traders and investors. Channels may appear both in uptrends and downtrends.