Get to know the Flag Pattern: Definition, Characteristics, and Types

Crypto traders definitely have a certain type of pattern that is used to identify possible market trends. One type of pattern is the flag pattern.

The flag pattern is a type of pattern that is well known among crypto traders. There are two types of flag patterns, namely bearish and bullish.

This time, VCGamers will discuss the complete definition of the flag pattern, characteristics, and the two types of patterns.

Also Read: This is the Definition of Dao Crypto and How it Works

Definition of Flag Pattern in Crypto

The pattern on the price movement chart on the crypto market is the definition of a flag pattern. This pattern many crypto traders use to see possibilities or trends that will occur in the market.

This type of pattern is similar to a flag or flagpole as the name implies. The flag section is an indication of a drastic price reversal.

In addition, the flagpole section will identify trends in price movements in a relatively short or short period of time.

Through these patterns or patterns, traders can read market trends and know when the right time is to enter the market when a trend is taking place.

Also Read: How to Read Crypto Candlesticks for Beginner Traders

Characteristics

Crypto traders will easily recognize the flag pattern because this pattern is quite clear in shape. There are 5 to 20 candlesticks which will provide a representation of trends in the market.

This flag pattern then has five characteristics. The first such characteristic is the previous ongoing trend.

Secondly, there are periods of consolidation and the third characteristic is the price reversal point.

In addition, there will be a price chart breakout and finally there will be confirmation regarding the price moving in a direction such as a breakout.

Also Read: Fakeout Means Failed to Happen, Here's the Explanation in Crypto

Types of Flag Patterns

There are two different types of flag patterns, namely bullish and bearish. The difference is that bullish is a pattern of rising and trending prices bearish is a downward price trend pattern in the market.

The two types of patterns have a similar structure, but the directions and volume patterns of the transactions are different.

The bullish flag pattern is a pattern indicating that the price trend will increase.

There is more buying pressure driving the price up. Momentum in the market will also continue to increase.

The Bullish flag has a horizontally oriented rectangle shape. However, it is often also a downward sloping trend.

Another variant of this Bullish is the Bullish Pennant which is a consolidation in the form of a symmetrical triangular shape.

Unlike Bullish, Bearish pattern is a pattern that provides an indication that there is a downward trend in market prices.

When the price is trending down, this so-called bearish flag pattern will indicate a slow consolidation of a fairly high after an aggressive downward trend.

This suggests that there is more selling pressure driving the price down. Momentum will also continue in the downtrend.

Thus a brief discussion of flag patterns or flag patterns.

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