Pattern 9 of 18: all patterns
Bull flag and bear flag
A sharp move (the pole) followed by a short, tight channel that drifts against it (the flag). A close out of the flag in the direction of the pole completes it.
The pole is a burst of one-sided orders. The flag is a pause where early traders take profit without the move reversing. When the pause ends, the move often resumes.
- A pole of at least 4 ATR completed in 15 bars or fewer.
- A parallel channel of 30 bars or fewer that leans against the pole and is no taller than 60% of it.
- A channel without a pole is not reported.
How the alerts work for this pattern
- 1Forming
The pole and four swings of the channel are in.
- 2Complete
A fifth swing still fits the channel.
- 3Close to signaling
A close comes near either channel line.
- 4Time to act
A candle closes outside the channel.
- xCancelled
One more pattern length passes without a break.
The textbook trade
- Trigger
- A close outside the channel.
- Stop
- Beyond the last swing on the other side.
- Target
- The length of the pole, projected from the break (the half-mast idea).
Things to watch
- A flag that drifts back more than about half of the pole is weakening. The scanner rejects flags taller than 60% of the pole.
- Flags are short-lived. If price lingers, the setup is cancelled.
Schabacker (1932) and Edwards and Magee (1948), who wrote that flags tend to form near the middle of a move, the origin of the phrase "flags fly at half-mast".
On our charts
Real detections by the scanner on our own price data (2026-08-01 to 2026-10-19), with the alerts it sent. Times are New York time. Some worked and some did not.
- 1Forming2026-10-16 23:30 NY4 swings fit between 81378.5 and 81616.4; watching for a close beyond either line
- 3Close to signaling2026-10-16 23:30 NYclose to the trigger at 81616.4
- 4Time to act2026-10-16 23:45 NYclosed through 81605.6: entry 81607.7, stop 81393.0, target 82510.2
- 5Result2026-10-17 07:45 NYtime (-0.07R)
- 1Forming2026-10-12 22:00 NY4 swings fit between 7789.2 and 7803.9; watching for a close beyond either line
- 4Time to act2026-10-12 22:45 NYclosed through 7788.3: entry 7787.3, stop 7804.1, target 7766.1
- 5Result2026-10-13 03:00 NYstop (-1.00R)
Education, not advice. A pattern describes what many traders watch for; it does not predict what price will do. The textbook stop and target are reference levels, not instructions. Trading involves risk.
Trade your way. The Desk backs the move.
You trade; the Desk allocates its own capital behind your trade, small at first and more as the move proves itself. You keep 90% of what that capital makes. $15 a contract, or try it first on a $1,500 demo.
Trading involves risk. This page is education, not advice; examples come from past data.