Flag
 |
Definition of 'Flag'A technical charting pattern that looks like a flag with a mast on either side. Flags result from price fluctuations within a narrow range and mark a consolidation before the previous move resumes. Likewise, "pennant" formations are usually treated like flag formations because they are very similar in appearance, tend to show up at the same place in an existing trend, and have the same volume and measuring criteria. |
 |
Investopedia explains 'Flag'Flags and pennants are among the most reliable of continuation patterns and only rarely produce a trend reversal. The only difference between the two patterns is that a flag resembles a parallelogram (or rectangle) marked by two parallel trend lines that tend to slope against the prevailing trend. The pennant, however, is identified by two converging trend lines and more horizontal which resembles a small symmetrical triangle. The important thing to remember is that they are both characterized by diminishing trade volume and though different, the measuring implications are the same for both patterns as demonstrated in the above illustration. |
Related Definitions
Articles Of Interest
-
Tweezers Provide Short-Term Precision For Forex Traders
Precise and short, the tweezer setup is similar to the more popular double top/bottom formations. -
Profiting From Carry Trade Candidates
Capitalize on the yield of the interest rate differential by using flags and pennants. -
Continuation Patterns: Rectangles and Pennants
Flags and pennants indicate direction of activity of the prevailing trend. Learn how. -
Continuation Patterns: An Introduction
Those random movements in the charts actually form patterns. Learn the basics of what these patterns are. -
Trade Forex With A Directional Strategy
Opening long or short positions to cash in on a trend is one of the simplest ways to trade forex. -
Forex Consolidation Trading - Trade The Calm, Profit From The Storm
Capture quick profits with the powerful directional biases of these two patterns. -
Market Summary For May 17, 2013
The U.S. stock markets moved sharply higher this week, on track for its fourth straight week of gains, driven by ongoing improvements in economic indicators. -
Parabolic SAR Buy Signals
The Parabolic SAR indicator is flashing "buy" in these four diverse stocks. Not simply relying on one indicator though, I take a look at the overall technical outlook and determine which ones ... -
Market Summary for May 10 2013
Major U.S. indices moved higher this week but, given the new highs, traders should watch for retracements next week. -
Buying The Upward Trend Channel Bounce
Find out how to set up the trades for four stocks that are moving higher within well-defined trend channels.
Free Annual Reports
