13. How to Trade the Flag/Pennant Patterns Like a Pro Part 1

http://www.informedtrades.com/
In this lesson we learn about what flag and pennant patterns are in technical analysis and how to identify them on charts in the stock market, futures market, and forex market for day traders and investors

Category:

Education

Tags:

• chartpatterns
• howto
• daytrade
• investing
• trading
• forexmarket
• stockmarket
• futures
• market
• informedtrades

[datatransfers667]

Hi Dave, thanks for the videos!! It seems like you need a lot of imagination to see these patterns though...

[InformedTrades]

Hey DataTransfers, There are times where seeing some of these patterns requires a lot of imagination. One thing about patterns is they only really work well if other traders are viewing the same thing as you. So the more obvious the pattern, in my opinion the more reliable it will be. It is also important to understand there are reasons why certain patterns do or don't work which is all related to supply and demand as well as market psychology.

Hope this helps you out some :)

-Brendan

[datatransfers667]

Thanks! I was wondering how good a pattern would be if I am the only one who sees it. Thanks for ponting out that the more obvious the pattern the more relevant it is. These videos are really helpful!!! Thanks again. =-)

[InformedTrades]

You're welcome. Keep in mind that the whole reason a pattern usually works is because so many people see it that they then are able to "make" it work so to speak.

There are also reasons why the patterns work in the first place relating to supply/demand.

Good luck with your trading :)

-Brendan

[yoroida]

Hi Dave, thanks for the very informative videos. And I got a question.

What if I see a flag which is similar to the one you used for the bull flag (big jump in price followed by consolidation) example, in a downtrend?

[InformedTrades]

Hi yoroida, Thanks for the comment I am glad you are finding the videos informative. If the flag is in a downtrend and is upright then this would still be considered a bull flag, but not as bullish as if it were found in an uptrend. If the flag is situated upside down, then this is a bear flag, and has the same implications as flag found in an uptrend but in reverse (its a bearish pattern). Hope that makes sense. Best Regards, Dave

[rmp8427]

I watched plenty of your videos. But during the explanation I recognized weird things in each video, that hopefully will be cleaned by adding other indys. Here 's one for this vid:

@3:50 - There is a great flag pointing down, where you draw the pennant. So what's the difference?

[jurg2008]

nice & concise ! clearly explained and most helpful! ;)

[saweaq1]

good video

[SapereFX]

@aniketwadkar Yes it can be done on smaller timeframes. I've seen it done on a 4 hour chart by a professional trader.

[SapereFX]

@6448595 Add in some bollinger bands and support and resistance levels and you should be able to make a go of it.

[SapereFX]

From what I've seen it's always a good idea when it breaks the pennant or flag in either direction to wait for it to retest the break line, as it improves the success rate.

[WHYDOYOUNEEDMYNAME]

Of all the technical signals flags and pennants are cuckoos.

[tippingk]

@datatransfers667 Yep, I'm with you 110% on that. No dis-credit Dave, I just don't see them.

Thanks!

[gengarjetty]

wait, so flags are just like rectangles, only the pole indicates the underlying trend? And penants are like flags, only like symmetrical triangles?