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Flag pattern is one of the types of price patterns.
duration is around 3 to 7 days
in this pattern lot of buying happens in short span
conditons to qualify as perfect FLAG are
1. Identify the steeper pole in the chart
2. price movement for 3 to 7 days should form a rectangular line
3. Break out happens only on positive side if considered a Positive pole and Negative side if considered a Negative pole, Volume will be high during breakout.
Flag patter is very profitable business tool in Stock Market for who use technical analysis for their trading purpose. It appears rarely in efficient market. But very often in inefficient market.
Conditions:
1. A steeper pole is required which will form within couple of days which indicates bulls are aggressive.
2. Bull will not set back. It will stand still beside. Waiting for sometime to reorganize itself. For a short period of time, 3-5 days.
3. Then a breakout with huge volume. A new trend is gonna forming. BUY it….
In this pattern lot of buying happens in short term.duration is 3 to 7 days
Conditions
A steeper pole and then rectangular shaped sideways movement can be considered as flag. generally take less time to form. Positive pole flag should give positive break out. volume is expected to increase while giving breakout
Flags are short-term continuation patterns mark brief pauses,or resting period ,during dynamic market trends.It is usually preceded by a steep price move (called the poles).
In a up trend ,the steep advance pauses and moves sideways for two or three weeks .then the up trend continues on its way.
Conditions to qualify
They are preceded by an almost straight line move (called a flag pole)on heavy volume
Prices pauses for about one to three weeks on very light volume.
The trend resumes on a breakout of the resistance with very high volume
It should resembles a small parallelogram that slopes against prevailing trend.
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