Bearish Flag and Pole Chart Pattern Explained
- Flag & Pole and Inverted Flag & Pole are both trend continuation chart patterns.
- In which Flag and Pole is a bullish trend continuation chart pattern.
- And Inverted Flag and Pole is a bearish trend continuation chart pattern.
- In this article, we will discuss about the Inverted Flag and Pole chart pattern:
INVERTED FLAG AND POLE CHART PATTERN
- An Inverted Flag and Pole is a bearish trend continuation chart pattern that formed after a sharp price movement to the downside.
- After the sharp downside movement, the price is enter in a consolidation phase.
- A sharp downward movement of the price is called the 'Pole'.
- And a consolidation phase is called the 'Flag'.
- The consolidation area indicates the buyers are trying to push the price up, but they are failed.
- The previous trend of the market was down, and after the pattern breakout the trend is continuing on the down side.
- Therefore, this pattern is called the bearish continuation flag and pole pattern.
- The inverted flag and pole pattern basically formed after an important support level breakout.
• When do the Inverted Flag and Pole pattern work well ?
- The Inverted Flag and Pole pattern work well, when the previous trend of the market is a downtrend.
- As well, this pattern would work well if it formed after a breakout of an important support level.
- When the retracement of the flag(consolidation phase) is below 50% of the pole (sharp movement of the price), this pattern works well.
• When should the Inverted Flag and Pole pattern be avoided ?
- Avoid a bearish flag and pole pattern if it formed in a bullish (uptrend) market.
- Because of buying pressure in a uptrend, there is a high probability that the pattern will fail.
- Avoid this pattern if the retracement of the flag (consolidation phase) is more than 50% of the pole (sharp movement of the price).
• Entry :
- Take entry when the candle is close below the flag.
• Stop Loss :
- SL should be placed above either the previous swing or above the breakdown candle.
• Target :
- The target should be the parallel distance of the pole.
Thank For Reading.....
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