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If the price trend is seen in the type of flag, i.e the steeper pole and side way movement and followed by the breakout on the same side is identified as flag pattern.
Condition to quality FLAG:
Steeper pole with approximately 70 degree steep
Rectangular shape side way movement with low volume after the steep(forms with in 3 to 7 days)
Breakout on the same side with high volume.
The flag should not drift down, if happens flag significance will be lost.
Flag pattern is a technical charting pattern that looks like a flag with a pole. Flags result from price fluctuations within a narrow range and mark a consolidation before the previous move resumes. It is a continuation pattern.
Conditions to qualify as perfect Flag :
1. Formation of a steep pole.
2. The price movement in the sideways forming a rectangle.
3. Takes lesser time to form.
4. Positive pole flag should give positive Break out and vise-versa.
5. There should be a significant volume during break out.
flag is a very powerful one and it occurs very frequently when compared to other patterns
qualities of a perfect flag is as follows
a steep pole of 75 – 80 degree should be formed
rectangular price movements should happen for 3-7 days
volume should be lower during the range area
flag should not drift lower
Flag pattern is one of the trend indicator in price pattern. A Perfect flat should meet the following conditions.
It should have a steeper pole followed by sideways movement which is considered as body of the flag. Positive pole flag should give positive break out. Volume should be significantly high during break out. The Flag should not drift low.
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