I want to tell you a little about figures such as flag and pennant.
These patterns are quite common on the chart, so all traders should know how to trade them.
What does the flag look like?
After a strong move (flagpole), the price begins to correct in the form of a rectangle, which corrects against the previous trend (flag).
What does a pennant look like?
Like a flag, a pennant appears after a strong trend.
After that, the correction begins in the form of a narrowing triangle.
How to exchange the flag?
A bull flag is a flag that has formed after a strong bull move.
The entry point for a bull flag will be a breakout and anchor of the rectangle (flag) resistance.
The stop is placed at the bottom of the flag.
To calculate a possible profit target, it is worth measuring the flagpole; this value superimposed on the breakout will be the target of their Profits.
How to exchange a pennant?
A bullish pennant forms after a strong bullish move.
To find an entry point, you need to wait until the triangle resistance is broken and the price fixes above the level.
The stop loss is usually placed below the nearest low.
To get a rough profit target, you need to measure the length of the up move against the triangle; this value will be your target above the breakout.
These patterns are very common and provide an excellent risk to reward ratio, usually greater than 1:3.
With the right trade, the value of profits will be even higher.
Don’t forget that these forms are continuation forms.
And don’t forget to set your stop loss.
Good luck for you!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I’ll be happy