your price chart, you will be equipped to measure the approximate price target of the formation. In this manner, it is angled contrary to the trend impulse creating the pole. Then we apply the same target rules as discussed earlier. In the example below, both represented an equal distance of 500 pips. The Flag pattern creates a channel correction, while the Pennant creates a triangle correction.
Flags : Learn, forex
Put a stop loss beyond the opposite extreme of the Flag. So, if you continue to see signs of a strong trend even after Target 2 has been reached, then by all means, keep a portion of the position open. The confirmation of the Bullish Flag pattern happens with the upside breakout, and we would prepare for a long position. A reversal pattern might provide enough reason to close out the trade and book profits. It measures the vertical size of the Flag Pole. The confirmation of the Bear Flag setup comes when the price action breaks the flag channel boundary downwards. The sketch above shows the two targets of the pattern. But there is nothing like actual charts to clarify the ideas presented so far.