Definition
A short, tidy pause after a sharp move, where price drifts slightly against the move between two roughly parallel lines, like a flag on a pole.
The story
The sharp move is the pole; the drift is the flag. A bull flag follows a sharp rise, a bear flag a sharp drop. Some traders read a flag as the move catching its breath and watch for price to break out in the direction of the pole. It doesn't always go that way.
Why you'll see it
Flags are a commonly named pattern on shorter timeframes.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms