FLAG and PENNANT
Hello everyone!
I want to tell you a little about such figures as Flag and Pennant.
These patterns are quite common on the chart, so every trader should know how to trade them.
What does the flag look like?
After a strong movement (flagpole), the price begins to correct in the form of a rectangle, which corrects against the previous trend (flag).
What does a pennant look like?
Just like a flag, a pennant appears after a strong trend.
After that, the correction begins in the form of a narrowing triangle.
How to trade the flag?
A bullish flag is a flag that has formed after a strong upward movement.
The entry point for a bullish flag will be a breakout and anchoring the resistance of the rectangle (flag).
The stop is placed at the low of the flag.
To calculate a possible profit target, it is worth measuring the flagpole of the flag - this value superimposed above the breakout will be the target for your profit.
How to trade a pennant?
A bullish pennant forms after a strong bullish move.
To find an entry point, you need to wait until the resistance of the triangle is broken and the price fixes above the level.
Stop loss is usually placed below the nearest minimum.
To get an approximate profit target, you need to measure the length of the bullish move in front of the triangle - this value will be your target above the break.
Conclusion
These patterns are very common and give an excellent risk / reward ratio, usually greater than 1: 3.
With correct trading, the profit value will be even higher.
Do not forget that these shapes are continuation shapes.
And don't forget to set your stop loss.
Good luck to you!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
I want to tell you a little about such figures as Flag and Pennant.
These patterns are quite common on the chart, so every trader should know how to trade them.
What does the flag look like?
After a strong movement (flagpole), the price begins to correct in the form of a rectangle, which corrects against the previous trend (flag).
What does a pennant look like?
Just like a flag, a pennant appears after a strong trend.
After that, the correction begins in the form of a narrowing triangle.
How to trade the flag?
A bullish flag is a flag that has formed after a strong upward movement.
The entry point for a bullish flag will be a breakout and anchoring the resistance of the rectangle (flag).
The stop is placed at the low of the flag.
To calculate a possible profit target, it is worth measuring the flagpole of the flag - this value superimposed above the breakout will be the target for your profit.
How to trade a pennant?
A bullish pennant forms after a strong bullish move.
To find an entry point, you need to wait until the resistance of the triangle is broken and the price fixes above the level.
Stop loss is usually placed below the nearest minimum.
To get an approximate profit target, you need to measure the length of the bullish move in front of the triangle - this value will be your target above the break.
Conclusion
These patterns are very common and give an excellent risk / reward ratio, usually greater than 1: 3.
With correct trading, the profit value will be even higher.
Do not forget that these shapes are continuation shapes.
And don't forget to set your stop loss.
Good luck to you!
Traders, if you liked this idea or if you have your own opinion about it, write in the comments. I will be glad 👩
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