#MEW Flag

The Flag pattern is a continuation pattern commonly found in technical analysis. It often occurs after a strong price movement (either upward or downward) and suggests a temporary pause or consolidation before the prevailing trend resumes. The pattern resembles a flag on a flagpole, with a strong initial move (the flagpole) followed by a period of consolidation (the flag).

How to Trade Using This Pattern:

Pattern Identification: Identify the Flag pattern by observing a strong, steep price movement (the flagpole) followed by a period of consolidation (the flag) where the price forms parallel trendlines.

Entry Point: Consider entering a trade in the direction of the prevailing trend when the price breaks out of the flag formation. This breakout indicates the potential for the trend to continue.

Stop Loss: Place a stop loss order below the lowest point of the flag pattern (for an upward breakout) or above the highest point of the flag pattern (for a downward breakout).

Profit Target: Measure the height of the flagpole (the distance from the start of the flagpole to the end) and project this distance from the breakout point to estimate a potential target price.