Flag and Pennant – What is a Flag and Pennant?

Definition of Flag and Penant: It is a well-known Forex trading outline which is distinguished by a rising movement with a huge slope that is followed by a consolidation period. It is regarded as a bullish pattern and a break from the consolidation is expected. The arrangement looks like a flag, the flagpole being the upward trend. The consolidation is sloped in a conflicting direction of the earlier trend or is simply flat. The consolidation period is bordered by the support lines and resistance, therefore proposing a flat model. When the exchange resumes its earlier trend by breaking the consolidation stage, the trader expects a cost objective thinking the “flagpole” length measured from the broken price level. On the other hand, even if this pattern is regarded as “bullish”, the break can move in another direction. A Forex trader would assemble a grouping by joining “stop loss” and “buy stop” orders.