Important: This page is part of archived content and may be outdated.

Flags are usually preceded by a sharp advance or decline. The flag looks like a rectangle directed against the prevailing trend:

The formation of this pattern is accompanied by a decrease in volume followed by a sharp increase after the breakout. The formation takes from 5 to 15 bars. The pattern is considered to be in the middle of the trend, so after the breakout the price may move the same range as it had moved before the pattern.