PRICE ACTION TRADING | Bearish Flag Pattern 🔰
Updated: Jul 26, 2022
Bearish flag pattern is a classic trend-following pattern.
Being relatively simple to recognize, it is applied in various trading strategies.
⭐️ The pattern itself signifies the correctional movement after a strong bearish wave in a bearish trend .
After setting a new structure low, the asset starts growing in value and the price action legs start forming a rising parallel channel .
What is particular about this growth is the fact that the price grows within the range of the preceding bearish impulse.
🔔 The trigger that we are looking for to sell the market is a bearish breakout of the support of the flag pattern (we need at least a candle close below).
To not be caught by a false breakout, it is highly recommendable to wait for a bearish violation of the last higher low level as well.
Only then the flag breakout is confirmed.
The breakout signifies the end of a correctional movement.
Then the price will most likely return to a bearish trend .
⚡️Trading the market aggressively, one opens a short position on spot just after the breakout candle closes.
⚡️The conservative trader will wait for a retest of the broken support of the flag for a safer entry.
✔️Safest stop will lie strictly above the highest wick (the last higher high) within the flag.
✔️Initial target will be based on the closest key structure support .
Learn to recognize this pattern and be disciplined to wait for its confirmed breakout. Only then a high trading performance will be achieved.
What pattern do you want to learn in the next post?🤔