The bold lines represent a generic looking flag formation.
See how the high and low of the flag matches previous important price levels? This is how we determine breakout. And as always when looking at a "bear" flag formation, the bias is for the downside. However this is not guaranteed, so you should always wait for confirmation before entering the trade.
A clear break out of the flag perameters is usually used as a clear confirmation.
A stop loss should always be placed above the high of the flag to avoid unnecessary losses.
If the price is not contained by your flag parameters, you must accept it and move on. A bear flag is only one of many possibilities and you must look at others.
See how the high and low of the flag matches previous important price levels? This is how we determine breakout. And as always when looking at a "bear" flag formation, the bias is for the downside. However this is not guaranteed, so you should always wait for confirmation before entering the trade.
A clear break out of the flag perameters is usually used as a clear confirmation.
A stop loss should always be placed above the high of the flag to avoid unnecessary losses.
If the price is not contained by your flag parameters, you must accept it and move on. A bear flag is only one of many possibilities and you must look at others.
Comment:
Very simple pattern that lines up nicely with important price action levels.
Hopefully someone has found my first "education" post helpful and will be able to apply this setup correctly in the future to increase their profits :)