After a strong, fast move (the pole), price often pauses in a small pattern before continuing.
Pole + small downward channel
Pole + tiny triangle
Flag
A small channel sloping against the pole. In a bull flag, price drifts down gently before breaking up.
Pennant
A tiny symmetrical triangle after the pole.
Trading them
- Enter on a break of the flag or pennant in the direction of the pole.
- Stop on the other side of the pattern.
- Target: the pole's length, projected from the breakout.
Wick says
Flags are the market catching its breath after a sprint. Then it sprints again!
Key takeaways
- Strong pole + small pause = flag or pennant.
- They are continuation patterns.
- Target = pole length from the breakout.