The Arps Flag Pattern tools highlight bull and bear flag patterns that will help you to find potentially profitable breakouts from trend pullback formations. User inputs allow you to control the characteristics of the type of flag you want to identify.
Arps Flag Patterns
In a Bull Flag pattern, a line connecting the low of the most recent upswing to the high of that swing is known as the “Flagpole”. A trendline connecting the highs of the correction pattern and a parallel trendline through the lows of the correction pattern define the “Flag” portion of the pattern. The channel acts as support and resistance. In an uptrend, a close above the bull flag pattern signals the continuation of the previous uptrend. Similarly, in a downtrend, a close below the bear flag pattern signals the continuation of the previous downtrend.
When the price breaks above the Bull Flag Pattern or below the Bear Flag Pattern, a colored dot appears on the chart at the point of the breakout and an alert is triggered. If no breakout occurs within the maximum number of breakout bars after the flag has been identified, the pattern is invalidated and subsequent moves in the direction of the flag will not be recognized. This reduces the likelihood of identifying a breakout based on a long-ago flag pattern.
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