What is the Flag Bearish
The Flag Bearish is a multiple candlestick chart pattern that indicates the continuation of a downtrend in the market. This pattern is called Flag Bearish as it resembles the shape of a flag.
Understanding the Flag Bearish
The Flag Bearish candlestick chart pattern consists of multiple candlesticks. The first candlestick is bearish and indicates that the market is in a downtrend.
The next few candlesticks are bullish and form a wedge or the inner part of a flag. Finally, the last candlestick is once again bearish and indicates the continuation of a downtrend in the market.
How to Trade Flag Bearish
During the bearish market we can find Flag Bearish patterns on the chart. Once when we detect the pattern we need to understand how to open positions.
Pattern formed channel (two red doted lines). On the channel upper red line represent resistance, bottom red line is support.
Open sell position – when price broke support (bottom red doted line). Candlestick need to broke and close below support line after that we can open sell position.
Set stop loss – by the trading rule of this pattern we need to set up stop lose above resistance (upper red doted line).
This is basically the same pattern for opposite trend (bullish).