Technical Glossary / Chart Patterns
Bull Flag
A sharp rise followed by a small downward drift, then a break higher.
Teaching sketch. It shows the shape, not a live quote and not a trade signal.
Definition
A bull flag is a continuation. The pole is a steep advance. The flag is a short, orderly pullback, often a small channel sloping against the pole. The pattern completes when price leaves the flag in the direction of the pole.
How to identify it
A near-vertical move, then a tight drift down or sideways that retraces only part of the pole. The flag should be smaller than the pole. A deep retracement is a different correction.
Bullish reading
The long trigger is a close above the flag. A common plan projects the pole length from the break. Risk sits under the flag low.
Bearish reading
A break under the flag low fails the continuation. The pole's strength is then being given back, which is information, not a reason to ignore the failure.
Common mistakes
Calling any pullback a flag. Without a sharp pole and a tight pause, you are looking at an ordinary trend.
Limitations
Flags are obvious, so the break is crowded. The first close out can reverse. Size the trade from the flag low, not from hope that the pole repeats exactly.
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.