Flag
A brief rectangular consolidation against the prior trend, bounded by parallel trendlines — a high-frequency continuation setup.
A Flag is the rectangular consolidation phase in a Bull Flag or Bear Flag. The two parallel trendlines form the flag borders; the slope is against the prior trend (down-sloping in a Bull Flag, up-sloping in a Bear Flag).
The key characteristics of a valid flag: it retraces less than 50% of the pole, volume contracts meaningfully during the flag, and the flag duration is short relative to the pole. A break out of the flag in the direction of the pole triggers the trade.
Related Terms
Bear Flag
A sharp downward pole followed by a tight, slightly upward-drifting channel — a continuation setup that resolves lower once the flag breaks.
BeginnerBull Flag
A sharp upward pole followed by a tight, slightly downward-drifting consolidation channel — a high-probability continuation setup in strong uptrends.
BeginnerContinuation Pattern
Any pattern that forms mid-trend and resolves in the same direction as the prior move — flags, pennants, and triangles are the most common.
BeginnerMeasured Move
A technique projecting a price target by duplicating a prior swing move from a breakout or consolidation point.
BeginnerPennant
A pole followed by a small symmetrical triangle — a tight continuation coil that resolves in the direction of the prior thrust.
Beginner