Triangle bullish flag pattern in candlestick chart

The bullish flag pattern is a common continuation pattern, usually appearing in an uptrend, suggesting that prices may continue to rise after a brief consolidation. It resembles a converging triangle, like a "flag," and serves as a signal for traders to capture trend continuation.

Pattern Composition:

• Flagpole: A rapid price increase in the early stage forms a steep upward segment.
• Flag: Prices experience a minor pullback at higher levels, forming two gradually converging trendlines (the upper trendline is flat or descending, while the lower trendline is ascending), creating a triangle.
• Characteristics: Volatility gradually narrows, and the consolidation period is relatively short.

Trading Signal:

When prices break above the upper trendline, it indicates that bullish forces have regained dominance, and the uptrend may continue, presenting a potential buy signal. After the breakout, the resistance of the flag often turns into support. The bullish flag pattern represents a "consolidation phase" during an uptrend, and catching the breakout point can help you ride the trend.

"This article is for educational purposes only and does not constitute investment advice."