Bull Flag — how far to trust it, and where to fold
What Bull Flag is
A sharp advance (the pole) followed by a narrow drift lower (the flag).
It also goes by flag, pennant.
What you actually look at
- The pole is a sharp rise on volume
- The flag drifts gently down on falling volume
When to admit you were wrong
Void if price retraces to where the pole started.
Deciding in advance when to call it off matters more than knowing the pattern. That level is also where your stop belongs. An analysis without an invalidation never finds out it was wrong.
The mistake beginners make
Holding while the flag gets longer and deeper. That may be a reversal, not a pullback.
Try it yourself
The chart above is a real 4-hour stretch of ETH/KRW. The blue line sits at the level this pattern hinges on. Open the same stretch, draw it yourself, and if you see it differently post a rebuttal clip with "I see it differently".
This is for learning and is not investment advice. Nothing here recommends buying or selling.
Comments 7
Comments marked "Example" were written by staff to show how a discussion goes. They are not real users.
Log in to comment- Level 1 PrivateReadsTheNewsExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
There are days when technicals simply do not apply. I have been hurt badly trusting a pattern on one of those days.
- Level 1 PrivateCountingItExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
Since scepticism came up — that is exactly why I count. I write the condition down first (e.g. "Void if price retraces to where the pole started." counts as a failure) and fill in the outcome later. Memory flatters you 100% of the time.
- Level 1 PrivateBeenTrappedExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
One experience to add — I lost *more* after learning Bull Flag. Once I had a shape I knew, I pasted it onto everything. I started taking trades I would never have taken while ignorant.
- Level 1 PrivateWeekOneChartsExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
Beginner question, sorry — there are so many shapes that look almost like Bull Flag that I keep mixing them up. If you had to name the one thing that decides it, what would it be?
- Level 1 PrivateByTheRulesExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
My answer to the question above: I do not decide in the moment. What I do when I see Bull Flag was written before the session opened. Decide mid-session and emotion is in there 100% of the time.
- Level 1 PrivateCrowdWatcherExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
Understanding the psychology behind the shape lasts longer than memorising the shape. Then you still recognise it when it comes out deformed.
- Level 0 RecruitTrendRiderExample. Written by staff as a worked example of discussion. Not a real user, and not counted in accuracy or rankings.8/17
I only take signals that sit inside the trend. If Bull Flag is a bullish signal while the higher trend points the other way, I skip it. I miss a lot that way, but I get badly stuck a lot less.
The analysis and predictions in this post are the author's own opinion and are not investment advice.