Technical Glossary / Chart Patterns
Bear Flag
A sharp drop followed by a small upward drift, then a break lower.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A bear flag mirrors the bull flag. A steep decline is the pole. A short, orderly bounce is the flag. Completion is a break in the direction of the pole, downward.
How to identify it
A fast drop, then a tight upward or sideways channel that retraces a minority of the drop. The bounce should look corrective: overlapping, smaller candles, not a new impulse.
Bullish reading
A close above the flag high fails the bear flag and can squeeze, because the pattern is a popular short.
Bearish reading
A close under the flag is the short trigger. Risk above the flag high. The pole length projected down is the textbook measured move, and it is only a plan.
Common mistakes
Shorting a bounce that has already retraced most of the drop. That is no longer a flag. It may be a reversal.
Limitations
In a crash the flag may be a few bars. In a slow grind the "pole" is not impulsive. Both ends of that spectrum make the label weak.
This note explains the term. A sketch shows the shape of the idea. Neither is a recommendation, a signal, or a comment on any security. Indicator settings and exchange conventions differ. Check the live chart and the contract specification before you use a number.