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📊 Price Action·beginner

Bull Flag

A short-term continuation pattern where price pulls back in a tight downward channel after a strong rally — usually breaks higher.

A bull flag forms after a sharp rally (the "flagpole"). Price then pulls back in a tight, orderly downward channel that looks like a flag attached to the pole. The pullback is shallow — usually just a normal retracement of the rally — and the channel slopes against the trend, which is a sign of healthy consolidation rather than reversal. When the pullback is done, price breaks UP out of the channel, resuming the rally. The pattern works because the pullback shakes out weak hands and lets new buyers establish positions before the next leg up. The break above the upper channel line is the entry trigger. Measured target: the length of the flagpole projected up from the breakout. A 100-pip pole + 30-pip flag means a 100-pip target above the breakout.
Real trade example

NAS100 printed a textbook daily bull flag in January 2024 — a 4% rally followed by a 2% pullback in a tight channel — before breaking out and adding another 5% over the following 10 sessions.

Related terms

Bear Flag

beginner

A short-term continuation pattern where price rallies in a tight upward channel after a strong drop — usually breaks lower.

Pennant

intermediate

A short-term continuation pattern where price consolidates in a small symmetrical triangle after a strong move — like a flag but pointier.

Breakout

intermediate

When price moves decisively through a significant support or resistance level, often triggering a new trend.

Engulfing Candle

intermediate

A candle whose body fully swallows the previous candle's body — a strong reversal signal.

Pin Bar

intermediate

A candlestick with a long wick in one direction and a small body at the opposite end — a rejection of that price level.

Support

beginner

A price level where buyers have historically stepped in to stop the decline and turn price back up.

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