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Flags and pennants: pause after an impulse
A runner takes a breath, but the next step is not guaranteed to be forward.
Recognize a flag or pennant and separate the prior impulse from the entry decision.
A flag is a relatively small channel-like pause after a strong move. A pennant compresses into converging boundaries after a similar impulse.
The preceding move provides context; without it, the same drawing may simply be a range or triangle. Specify relative size and duration before reviewing examples.
A continuation interpretation needs a breakout and a failure rule. Buying the last impulse candle merely because a flag might form is a different, often less controlled decision.
The pole's height can be a projection convention. It is not evidence that the market owes another equal move, and gaps or wide spreads can dominate the trade.
Let’s work through it
- Identify the prior impulse
- Measure the pause
- Define breakout and failure
Let’s use numbers · hypothetical example
Price 100→112 forms a pole, then pauses in a descending 108–112 channel. A close 113 may meet a chosen upward-break rule. A 12 point projection from 112 would be 124, but it remains a hypothetical planning level.
Easy mistakes to watch for
- Any channel is a flag
- Chasing the pole
- Assuming an equal second leg
Keep in mind
The pause can turn into a reversal. Measure risk from the actual entry, not the attractive start of the pole.
Your turn
Draw a flag that continues and one that fails. Compare entry distance and available reward after confirmation.
A quick check before we move on
What gives a pennant its continuation context?
- Its colour on the platform
- Only its triangular outline
- A preceding impulse plus the subsequent conditions
Check answer
A preceding impulse plus the subsequent conditions The prior move and later price evidence provide context. A small triangle alone is not enough.
Sources and further reading
Content reviewed: 29 October 2026
Educational material with hypothetical examples. Trading can cause substantial losses. A course, pattern, stop order or past result cannot guarantee a profit or limit every loss. Practise in simulation and check current rules and product terms in your jurisdiction.
