Figures "Flag" and "Pennant" - Peculiarities of trend continuation patterns analysis

Let's continue to get acquainted with graphical technical analysis. Last time we talked about large formations - trend reversal patterns. Today I will tell you about peculiarities of the analysis trend continuation figures - "Flags" and "Pennants".

Figures "Flag" and "Vympel - uncomfortable sidebar

Figures "Flag" and "Pennant" can be formed both after growth and after fall. There is often a question on interpretation of these figures of the technical analysis, after all in the process of their formation it is easy to confuse them. I never try to determine on a live chart in the moment, which is forming now - the "Flag" or the "Pennant"? I start from the philosophy of formation of these figures. "Flag" or "Pennant"This is a tedious little sideways move in which the papers are resting from the past movement and gaining strength for a new trend.

The classic representation of the figures "flag" and "pennant".
The classic presentation of the figures "Flag" and "Pennant".
Fig. 2. Chart of the currency pair EUR/USD (weekly slice).
EUR/USD currency pair chart (weekly slice).

Flag" Figures or "Pennant". - is not just a foundation for the future movement, it is a graphic representation of traders' uncertainty. That's why the formation of these figures often takes place when the trading volume decreases. Well, in order to see Flags and Pennants better, don't forget about the classic notion of them, including that they must be preceded by a consolidation.

Fig. 3. "Vympeloflag" on the daily chart of Sberbank.
"Vympeloflag" on the daily chart of Sberbank.

The figure's shaft is no problem

There is one more peculiarity of formation of "Flags" and "Pennants" figures on Russian securities charts. Sometimes it is difficult to understand where a figure begins and where its "flagpole" ends. Take the "flagpole" as an approximate reference point and there will be no problems. Since the Russian stocks are very volatile, sometimes the Tree can be a single candle. But this candlestick must be the so-called "long day", which means it must be commensurately bigger than the candlesticks that show the recent moves.

Sometimes "Flags" and "Pennants" get so caught up in time that it's easy to mistake them for independent channels. In this case, time frames help me. I have found out through experience that "Flags" and "Pennants," which actually carry a continuation of the trend, often have "bands" in their structure - 5, 8, 13 candles. Did you recognize it? Yes, the mystical Fibonacci numbers met me here, too.

The "Flags" and "Pennants" patterns are often seen when trading intraday, so practice and look for these trend continuation patterns on popular Russian stocks on hourly, half-hour and fifteen-minute time frames. I'm sure such practice will help you see a lot of interesting and profitable trading decisions!

Other articles about technical analysis figures

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