The best trading strategy to trade by the flags
Bullish Flags short sloping rectangle bounded by two parallel trend lines. Breakout is upward.
Flagpole: The flagpole is the distance from the first resistance or support break to the high or low of the flag
These formations usually form near the midpoint of a steep, quick price trend. If you do not have a strong advance or decline leading to the chart pattern, ignore the flag
Price action bounded by two parallel trend lines. Prices
usually go against the prevailing trend: They rise in a downtrend
and fall in an uptrend, but exceptions are common
For a bullish flag, 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.
The length of the flagpole can be applied to the resistance break or support break of the flag to estimate the advance or decline
Calculate the price difference between the start of the trend and
the formation. Prices should move at least this amount above (for uptrends) or
below (for downtrends) the end of the formation this is preferred for most forex trading signals provider
flags are common formations, identification guidelines should not be taken lightly. It is important that flags are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk
buy after price breakout above the flag pattern and take profit equal flagpole + the lowest point of flag
The Flag portion of the pattern must keep running between parallel lines and can either be inclined up, down or sideways. Banners which are calculated same way from the first move (precedent: post up and Flag inclining up), corrupts the execution of the example.