Forex Chart Formation Patterns_4. Learn Forex Bull Flag Formation Patterns

Lesson 4: Learn Forex Bull Flag Formation Patterns A bull flag is a bullish continuation pattern. It follows a strong move upwards and consists of a flagpole as the strong move to the upside - and a consolidation phase which is known as the flag. As you can see, there has been a strong bullish move but because the market needs to adjust to the new higher prices, it goes into the consolidation phase and the price retraces lower in a narrow range. Note - that for it to be a genuine bull flag, the two lines forming the flag need to be parallel - whereas often they will be sloping downwards. There are two basic approaches to entering the market with this pattern. Aggressive traders will enter at the bottom of the flag for the maximum profit; conservative traders will wait until the price breaks out from the formation - and only then will they enter the market. The price target for this formation should be the height of the flagpole measured up from the bottom of the flag.