During this period, prices may slowly channel upward and retrace a portion of the initial move. The bear flag is identified as a period of consolidation after the completion of prices initial decline. This decline can be steep or slowly sloping and will establish the basis for the trend.Ģ. Traders will need to find the flag pole which will be identified as an initial decline. The pattern itself is divided into three parts:ġ. Identifying a bear flag can be easy once traders understand the components, and this is applicable to all financial markets, not just forex. The strong move down is known as the ‘flagpole’ whilst the consolidation is referred to as the ‘flag’ itself.īear flag pattern How to identify a Bearish Flag on Forex Charts The bear flag formation is underlined from an initial strong directional move down, followed by a consolidation channel in an upwards direction (see image below).
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