Flag Pattern Strategy in Currency Trading
Forex trading now being very popular through out the world . Many investors like to trade in Forex than stock markets . But , Without proper basic knowledge , traders or investors can loss all their valuable money. So before investment in Forex Market, traders should learn few basic fundamentals & strategies to reduce risk. The "Flag Pattern Charting analysis" is a common and highly effective price reversal pattern in Forex Market. The Flag pattern usually occurs after a significant up or down market move. After a strong move, prices usually need to rest. This resting period usually occurs in the shape of a rectangle, thus the word "flag". The Flag is considered a continuation pattern because after resting, prices will usually continue in the direction they did before.
Flag Buy Signal
When price has moved higher and prices have consolidated, creating a channel of support and resistance, a buy signal is given when prices penetrate and close above the upward resistance line.
Flag Sell Signal
Assuming prices previously moved downward, then after a period of price consolidation, a sell signal is given when price penetrates and closes below the support line.
See the above chart to be specific.
