A hands-on options curriculum covering real trading concepts. Read the lessons, work through examples, and test your knowledge.
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Lesson 2: 6.1: Flag Patterns
Master Bull and Bear flags, their mechanical setup, and precise target calculation.
1. Bull and Bear Flags
A Flag pattern is a short-term continuation structure consisting of a strong, almost vertical price move (the flagpole) followed by a tight, downward-sloping channel (the flag). It represents a brief consolidation phase where sellers take small profits but are met with immediate buying interest.
A Bear Flag is the inverse: a sharp downward drop followed by a tight, upward-sloping consolidation channel. It is a highly reliable pattern indicating that sellers are preparing to drive prices lower.
★ Measurement Rule: The profit target is calculated by measuring the height of the flagpole and projecting it from the breakout point (known as the measured move).
Click to enlargeTechnical Market Structure Blueprint
Interactively map key institutional Price Action patterns. Switch between the 4 technical blueprints below and click the glowing blue hotspots to dissect the market mechanics.
Pattern Technical Explainer
Select any glowing node on the technical chart to inspect the institutional structure details.
KNOWLEDGE RECONNAISSANCE
How is the target of a Bull Flag pattern calculated?
More lessons in this module
- 6.0: Introduction to Chart Patterns
- 6.2: Pennant Patterns
- 6.3: Triangle Formations
- 6.4: Wedge Patterns
- 6.5: Channel Trading Mechanics
- 6.6: Head and Shoulders Formations
- 6.7: Double Tops and Bottoms
- 6.8: Cup and Handle Pattern
- 6.9: Ascending and Descending Triangle Breakouts
- 6.10: Pattern Failure & Trap Mechanics
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