Chart Pattern #7: Flag Chart Pattern
A flag chart pattern takes shape when the market follows consistent price action then breaks out in a massive uptrend or downtrend.
It’s very similar to the wedges chart pattern.
But the focus is on what’s happening before the wedges and the breakout.
Usually, the asset in the market has been trying to break through price resistance for some time.
This represents the “flag pole” as seen below.
What Does This Mean For You?
When the price keeps moving slightly up and down, it creates a level of support or resistance.
Once the prices break that level of support or resistance, then the price typically breaks out in an uptrend or downtrend.
If you time your trade right, you’ll be able to profit from the new trend after the price breaks through either its resistance or support levels.
This means you want to have your trading strategies set up with good entry and exit points so you can take advantage of the breakout trend.
How To Trade Flag Patterns
According to the technical analysts, you should look for the initial uptrend or flag pole that’s been trying to break the resistance. Then look out for consistent price action to confirm the flag pattern.
The analysts also refer to this as Fibonacci retracement to confirm the shape of the flag based on volume and price correction.
The Risk Involved
The flag pattern is based on technical analysis and is not necessarily an accurate predictor of price.
So it makes confirming your entry point more difficult. You will have to rely on your best judgment after such technical analysis.
But our team at Big Energy Profits is ready to do that work for you. Click here to watch our free training and learn more.
Author: Anthony Speciale
Anthony Speciale Jr. Born and raised into a blue collar family in the suburbs of Northern New Jersey, I have in recent years put down the wrenches I’ve been turning for the better part of my entire life and have become a professional energy trader. My mother was a nurse practitioner and my father was an auto mechanic. I had literally watched both of my parents work endless hours with their hands throughout their entire lives and after loosing my mother at a young age to cancer, I had decided I wanted a different future than the path I was currently on. At a young age I was a struggling student who didn’t excel very well academically and college wasn’t really in the cards for me, but I was always a disciplined worker. When I had put my mind to something, there was nothing that was going to stop me from reaching and exceeding my goals I had set for myself. So, as life had evolved, so did my desire for freedom. It was never much about the money for me, but it was about the success and the freedom that accompanied that success. Over a decade ago, I decided to specialize in just one sector of the market. I knew that I only needed to be proficient at just one area of the market to achieve the goal I had set forth. Trade passively while producing massively. Well, that’s exactly what I did. After several years of failed attempts, endless education, trial and error - I had finally yielded myself the success and freedom I was desiring. After making myself over $1,000,000.00 trading this very method, it was time to share my success with those who also desire the freedom I did. After a lot of work, time, effort and sacrifice - Big Energy Profits went from merely a concept into a very real reality.