How to easily trade bullish flag patterns
Those traders who love doing technical analysis then bullish flag patterns is the area of their choice. Most of the time we see big momentum in the market and its normally due to this kind of pattern. In this article we will discuss high profitable opportunities relating to the bullish flag possibilities.
What is Bull Flag called?
A bull flag is a kind of pattern that normally arise after a little pause in the trend and ends up with a strong upward move. The bull flag will look like a downward rectangle that shows the price going downward against the trend for some time.
We called it the consolidation time and after that period expect a higher push on the price.
How to look for a bullish flag on our charts
It might not be easy for every one to identify a bull flag on your charts because we have to look at different things before we consider it as a bullish flag. So, the most important key components for identifying the bullish flag patterns are given below:
- It will be preceding type of upward trend
- There will be downward sloping rectangle for trend
- The retracement should not be more than 50% otherwise, it will not be a flag pattern. Most of the time retracement will end up at 38% of the main trend.
You should better enter into the bottom of the flag or when the price breaks the upward boundary of the channel slope.
Strategy for bull flag
In the above image you can understand the bull flag pattern easily. This image shows that currency has gained a lot of strength and traders are more willing to buy it. The previous uptrend is shown in black color (flag pole). The blue zone in image shows that prices were consolidated at this stage following the downward direction.
Traders should look for entering their positions at the lower side of the price or a proper break above the upward channel and they can exit from trades at the top shown with dotted line.
200 Forex Pips No Repaint indicator also provide signals on such breakout in the form of arrows and dots. You can find more information about the indicator by clicking here.