ST,
Can I bother you for a lesson please? I have tried to look up bear flag and bull flag, but things are as clear as mud after reviewing various definitions of the same. Would you please teach me how to identify and differentiate between these two flags?
Can I bother you for a lesson please? I have tried to look up bear flag and bull flag, but things are as clear as mud after reviewing various definitions of the same. Would you please teach me how to identify and differentiate between these two flags?
Bull Flags and Bear Flags are corrective patterns which we come across very regularly. I am posting a Tata Steel hourly chart which shows bull flags and bear flags both.
1) Flags are antitrend corrective patterns...bull flags we get in uptrends ,bear flags in downtrends.
2) Flags are continuation patterns...the main trend continues after the flag is over anf market takes a breakout from the flag.
3) Flags generally come at 50 % mast ie they come at 50 % of the move
4) Flags are shallow anti trend movements which can be drawn in the shape of the flag...hence the name. They are not too steep also they normally will not go below 50 % of the mast ( taking example of bull flag ) here.
5) Flags give a false impression of a trend change but if you remember the above characteristics of the flag, it is possible to judge the flags in real time as they are forming and one can trade the breakouts.....
6) Uptrend continues after bull flags and downtrend continues after the bearish flags.
Trust the above helps understanding flags....
Smart_trade