What is the flag candlestick pattern?

The flag pattern consists of two trend lines. In an uptrend, if the market breaks through the upper trend line, it means that the market is going to go up, which is the time to buy. The downtrend is based on the market falling below the lower trend line as the standard for issuing a short signal.

The use of the flag pattern is of course not limited to breaking the trend line, but also depends on the volume.

First of all, when the market has not broken through, the trading volume should shrink; when the market breaks through, the trading volume will increase. Only when such a sign occurs can this flag pattern be noticed and valid.

In addition, the flag pattern also has its price measurement target. Flag patterns generally appear halfway through the entire trend range. This means that as long as you wait for a buy or sell signal from the flag pattern, you can hold a position and use the previous drop or rise before the flag as a benchmark to gauge where your next price target is.

More generally, we should calculate the distance of the previous movement from the original breakout point. In other words, the starting point should be the point at which the signal occurs when the current trend begins.


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