![]() ![]() ![]() The bear flag pattern will breakout from the consolidation once price breaks the lower channel. ![]() The bear flag appears in a downtrend as opposed to the bull flag which occurs in an uptrend.The bull flag and bear flag represent the same chart pattern however, just mirrored. Pattern helps determine entry and limit levels The table below identifies the advantages and limitations of the bull flag pattern: ADVANTAGES When all components of the bull flag are identified and present within the chart, the bull flag pattern is considered to be a formidable pattern to trade. The reliability of the bull flag pattern depends on the success of the checklist mentioned above. How reliable is the Bull Flag in forex trading? Traders then look to take profits by projecting the length of the flag pole preceding the flag (black dotted line). To trade the flag, traders can time an entry at the lower end of the price channel or wait for a break above the upper channel (yellow). Prices consolidated in a gently downward sloping channel (blue). The previous uptrend (flag pole) is noted in black. The AUD/CAD is no stranger to the flag pattern. Hence, traders have a fundamental back drop to support the technical picture for additional strength in AUD. As a result, the AUD performed well against most other currencies in part because it offers a higher rate of return owing to its interest rate. The following trading example shows the bull flag on a forex chart.Īs shown by the bull flag chart pattern above, traders have been buying risk through commodities, the stock market, and risk-based currencies. Look for price to break higher with a length potentially equal to the size of the flag pole.Enter at bottom of the flag or on the breakout above the high of the upper channel boundary.Ideally, the retracement ends at less than 38% of the original trend ![]()
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