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bullish Signal
Bullish Flag
A bullish flag is a continuation pattern that occurs after a sharp price increase (the pole). It consists of a short period of consolidation within a parallel, downward-sloping channel (the flag).
How to Trade
Enter a long position when the price breaks above the upper resistance line of the flag. Set a stop loss below the flags low and a profit target equal to the height of the preceding pole.
Market Psychology
After a strong rally, some traders take profits, leading to a minor consolidation. However, the underlying demand remains strong, and the breakout suggests that the bulls have regained control.
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Bearish Flag
Technical Diagram
This visual represents the ideal candle formation and breakout points for the Bullish Flag pattern.