Forex Chart Formation Patterns_5. Learn Forex Bear Flag Patterns

Lesson 5: Learn Forex Bear Flag Patterns

If there is a continued pattern in a bearish trend, it is a bear flag. It follows a strong
move downwards - and comprises a flagpole as the strong move to the downside
plus a consolidation phase which is known as the flag.

There’s been a strong bearish move - but - as the market needs to adjust to the new
lower prices, it goes into a consolidation phase and the price retraces higher in a
narrow range. Take note that for it to be a genuine 4. bear flag, the two lines forming
the flag need to be parallel - but often will be sloping upwards.
There are two basic approaches to entering the market with this pattern. Aggressive
traders will enter at the top of the flag for the maximum profit whereas conservative
traders will enter only when the price breaks from the formation. The price target for
this formation should be the height of the flagpole measured down from the top of
the flag.