How to read a Bull Flag
A bull flag is a pause inside a strong move up. Price runs hard, then drifts sideways or a little lower in a tight channel while buyers catch their breath. On a 1-minute chart of a busy small cap you can find several in a single morning.
What it looks like
Start with the pole, because it matters most. It should be fast and obvious: a run of wide green candles, usually on heavy volume. Without a real pole, a sideways drift is just a sideways drift.
The flag that follows is quieter. Candles shrink, volume dries up, and price slips down or sideways between two roughly parallel lines. A healthy flag gives back less than half of the pole, often closer to a third. If it gives back most of the move, the buyers were less committed than the pole made them look.
How traders read it
The usual trigger is the first candle that breaks above the top of the flag. Some traders wait for that candle to close above the line. Others buy the break as it happens and accept more false starts in exchange for a better price.
Most people put the stop just under the flag's low. Below that point the pause has turned into a real pullback, and the setup they were trading no longer exists.
The textbook target measures the pole and adds that distance to the breakout price. Use it as a rough guide. On fast intraday charts, plenty of traders take some profit at the prior high and let the rest run.
When it fails
Flags fail often. Watch for volume picking up on the red candles inside the flag, a pullback that drops below the middle of the pole, or a breakout candle that falls back into the range a bar or two later. The breakout on light volume is the one that traps the most people.
Flags late in the day, or after a stock has already made several big legs, tend to work less often. The buyers who would push the next leg may already be in.
Practice it
Every example above is a confirmed bull flag from a real session. Open one to replay it candle by candle. Try marking your entry and stop before the breakout, then let it play out and see whether you'd have been right.
Educational content only, not trading advice. Patterns describe what price did, not what it will do next.