Flags and pennants

What it is

A flag is a strong move (the pole) followed by a small, orderly pullback that drifts against it in a narrow channel. A pennant is the same idea with a tiny triangle instead of a channel. Both usually resolve in the direction of the pole.

How to spot it

• A fast, strong pole first.
• The pullback is shallow and slow compared with the pole.

How to use it

• Enter on the break of the flag in the pole's direction; stop on the other side of the flag.
• A common target is the pole's length added to the breakout point.

Common mistakes

• Calling a deep, messy pullback a flag.
• Trading flags with no strong pole before them.

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