Flag Chart Pattern

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A flag chart pattern is a short-term continuation pattern that is formed when the price of an asset moves in a strong directional trend, and then experiences a period of consolidation before continuing in the same direction. The pattern is created by two parallel trendlines that form a "flag" shape on the price chart.

The flag pattern typically lasts for a short period, usually a few weeks, and signals a potential continuation of the prior trend. Traders will often enter a position in the direction of the prior trend when the price breaks out of the flag pattern.

There are two types of flag patterns: bull flags and bear flags. Bull flags occur when the prior trend is bullish, and bear flags occur when the prior trend is bearish.

Wedges and flags are both considered continuation patterns, meaning they signal that the prior trend is likely to continue after a period of consolidation. Wedges can be bullish or bearish, depending on the direction of the prior trend, and flags can also be bullish or bearish, depending on the direction of the prior trend.

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