One of the best and one of my favorite (day) trading patterns and strategies is the flag or triangle break, especially in a bull market or after a huge run or in a clear uptrend.
In this post, I want to briefly cover what a flag or triangle break pattern is and how you can trade this pattern with an example on NANOBTC.
What is the flag break pattern?
A flag or triangle pattern is formed when the price has consolidated in a clear (descending) range and support after it had made a big move/spike.
Here's an example of a (descending) flag/triangle break:
How to trade the flag break and manage your trade?
Wait till the price clearly breaks the drawn flag pattern. Enter when the candle is above the 50 and 12 ema's (or any other longer and shorter timeframe ema you prefer) for confirmation, higher probability and which then serves as a support:
Stop loss
As a stop loss, you can use the 50 ema (or any other longer term ema you prefer but I would go with at least 30 or longer), underneath this level or just under the flag/triangle support line.
Profit Target
As profit target, you can use the initial spike/run as your target for the next runup:
Obviously, you can take profits at any time when you feel comfortable with or want to secure your profits. You don't have to wait for a target to be reached in order to sell.
You can always sell a portion and let the rest ride longer. This will reduce your risk, give you peace of mind and more patience to let your winner(s) run. And that is how you win the game of trading, cut your losses short and let your winners run.
Please like and share if you found this informative and helpful. Leave a comment if you have any questions.
And until next time, good luck with your trading!
In this post, I want to briefly cover what a flag or triangle break pattern is and how you can trade this pattern with an example on NANOBTC.
What is the flag break pattern?
A flag or triangle pattern is formed when the price has consolidated in a clear (descending) range and support after it had made a big move/spike.
Here's an example of a (descending) flag/triangle break:
How to trade the flag break and manage your trade?
Wait till the price clearly breaks the drawn flag pattern. Enter when the candle is above the 50 and 12 ema's (or any other longer and shorter timeframe ema you prefer) for confirmation, higher probability and which then serves as a support:
Stop loss
As a stop loss, you can use the 50 ema (or any other longer term ema you prefer but I would go with at least 30 or longer), underneath this level or just under the flag/triangle support line.
Profit Target
As profit target, you can use the initial spike/run as your target for the next runup:
Obviously, you can take profits at any time when you feel comfortable with or want to secure your profits. You don't have to wait for a target to be reached in order to sell.
You can always sell a portion and let the rest ride longer. This will reduce your risk, give you peace of mind and more patience to let your winner(s) run. And that is how you win the game of trading, cut your losses short and let your winners run.
Please like and share if you found this informative and helpful. Leave a comment if you have any questions.
And until next time, good luck with your trading!