Bull Flag
A Bull Flag is a bullish continuation pattern where a strong upward move (the flagpole) is followed by a shallow, tight downward-sloping consolidation (the flag), which resolves with a breakout in the direction of the original trend.
What it measures
The flagpole is a near-vertical multi-candle advance. The flag is a tight parallel channel or wedge that slopes gently downward, typically retracing 30–50% of the pole. A close above the upper flag boundary is the trigger.
Parameters
| Name | Default | Range | Note |
|---|---|---|---|
| pole_min_atr | 3 | 1–10 | Minimum flagpole size in ATRs. Ensures the pole is a real impulse, not just noise. |
| flag_max_retrace_pct | 50 | 25–75 | Maximum retracement of the pole allowed inside the flag. Deeper retraces invalidate the pattern. |
How it behaves
Bull flags are among the most reliable continuation patterns because they combine strong prior momentum with a controlled pause. Volume typically shrinks during the flag and expands on the breakout — that volume pattern is a strong quality filter.
When it misleads
A "flag" that retraces more than half the pole is really just a topping structure. Volume that stays flat or rises during the flag phase also disqualifies it — real bull flags see distribution taper, not continue. In choppy markets many bull-flag-shaped patterns break out and immediately reverse; combine with higher-timeframe trend and a level test on the pole low to filter.
Backtest result
Sourced backtest in preparation — we're running the rule on our own historical candles before publishing numbers we can stand behind.
FAQ
- How long should a bull flag last?
- Typically 5–20 candles. Flags that drag on for longer often morph into wedges or full reversals; flags that resolve in 1–2 candles are usually not really flags, just pullbacks.
- Bull flag vs pennant?
- A pennant is a symmetric triangle instead of a channel — highs come down while lows come up. Same conceptual role (continuation after impulse), different shape.
- What is the price target?
- The classical projection is the height of the flagpole, added to the breakout point. It is a useful reference but rarely hit exactly; take partials near it.
Build a strategy with Bull Flag
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