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The Ultimate Forex Flag Pattern & Trend Strategy Tutorial
hey everyone naked with pips University calm in this lesson I'm gonna teach you how to profitably trade the flag pattern it's a very simple pattern it's one of the many patterns I use here at pipsy University calm you guys are gonna absolutely love it because it's so simple I'm gonna teach it to you in a simplistic way and you guys are gonna find instant use for this it's a classic chart pattern a lot of people know it but I'm gonna make it easy for you to implement into your trading let's get into this alright let's get into this now before I get into this I am gonna show you guys the very beginning basics and the concept behind flag patterns whether they're bullish or they're bearish but I am gonna be teaching you guys something that happens a little bit more than the classic chart pattern and I think this is a little more useful and something that you guys can use every single day no matter what the time frame is so let's get into this I am gonna start with just the basic idea of what a flag pattern is in the forex market we're gonna start this off with no candlestick data so what a flag pattern really is is we have a really big spike either up or down and I will show you guys bearish am bullish bullish means it's going up we're looking for buys bearish it's selling we're looking for shorting opportunities to the downside and you can trade the flag patterns or trendline breaks either way that I'm gonna teach you in this video so let's start this off with a green one so that way we can see let's make it kind of thicker so the theory behind flag patterns is we have a really strong move to the upside if it's a bullish one we'll have a strong move to the upside followed by little I don't know if I can do any drawing things real quick let's see if I can followed by followed by a little correction that looks like a flag pattern so it'll look something like this and it would be like the normal flag no matter what country you're living in it would be a flat we call this the flagpole so if it was in your front yard like a redneck like I used to be I used to put the American flag right in my front yard true redneck status but I liked it so whatever I don't do it anymore cuz it just looked ridiculous down here in Fort Lauderdale nobody does it but in Tennessee it was common so I didn't feel too bad and I love I love the flag so we call this a flagpole which would be the strong impulse move followed by the little sideways correction and all that you're doing in a bullish flag pattern is once it starts going sideways like this soon as it breaks to the outside of the flag trendline and I'm going to show you guys this you're looking for the bye to the upside to do another monstrous move that usually is the length of the flagpole so to say that again we're looking for a strong move to the upside followed by an easy small correction retracement and then once it breaks the trendline we're looking for it to go up the distance of the flagpole and that's usually how you can take your profits so I'm gonna remove all of this let's clear the objects remove all drawing tools and let's let's dive into this really quick and to understand flag patterns you really need to understand trend line so trend lines you have to connect them at points two points are minimum three points are ideal for trend lines so for an example of a trend line we would take one point right here this is the next point and you can see we have one point two points and then we dropped again and then we broke out and that would be a mini flag breakout so I will teach you guys some take profit stuff but I'm just showing you the very beginning basics of this so the first thing that we're wanting to find is a strong and we're gonna do bear or a bullish moves first so the first thing you are doing no matter what chart time frame no matter what asset class you can use this pattern you're looking for a strong move to the upside if you're looking for a bullish flag pattern so we have a strong move to the upside followed by our correction now this correction was very very smooth it wasn't straight up and then straight back down as like a pump and dump it came up it dropped traced a little bit pulled out to our trendline fell again we broke outside of our trendline and then we move to the upside now this isn't the ideal flag pattern but this is something that you guys will see it's something that you guys will probably get faked out with and I'm showing you all types of examples in this video so this would be the bare minimum of a counter trend line break or a flag pattern so we have one point two points ideally three points would be the best but two points it can be sort of a good signal and it was like a 70 pip move to the upside and then it dropped and then it moved up again so all that you're doing is once the market can close above the trend line on this you are looking for buys to the upside and I'm gonna unlock my phone really quick because I have some really great examples that we can go through that are better than this so I'm gonna actually go over to new zealand dollar cad and i'm gonna show you guys a bearish one i'm I made a list and I want to go through this with you guys and a lot of times we have the same principles and counter-trend line breaks that resemble flag patterns so a lot of people will say that you have to have monstrous candles to trade this style of trading but in my opinion you don't necessarily need a strong impulsive move or a strong down move to make a flag pattern so you can see we don't have a really strong instant down move we have a gradual downtrend followed by a smooth retracement to the upside and then we melt it off again now this is a picture-perfect trend line break or a flag pattern however you guys want to call it they're technically the same thing but the counter trend line break happens a little bit more almost every single day than the flag pattern so this would be a bearish one and all that we're doing is we're connecting the trend line of this going sideways so you can see we have one point starting right here two points a bunch of a bunch of sideways price action and then once we closed we got our moving average cross and we dropped so this is fantastic for a selling opportunity so if you look at this just on a a one-hour chart or a 15-minute chart it does not matter soon as the market usually I will trade as soon as it breaks you can drop down to a 30-minute chart and usually find the entry before that happens so 30 minute chart happened right here so we would have gotten in it gotten in it before the one-hour chart closed so if you guys do find any counter trend line breaks or if you do find flag patterns and you're on a one-hour chart or a 4-hour chart and it broke the trend line but it's not closed yet you can go down to like a smaller time frame like a 30 minute and find this so the way I identified this is we have this downtrend right here you can do them all types of places these are just trend line breaks nothing special very easy pattern so you guys can trade this as soon as it breaks to the downside and closes right here so my entry would be right here since it closed below this trendline you could even move the trendline right there as soon as it closes I'm selling it my stop-loss is gonna be above the high of that candle because if we are expecting down movement or selling momentum I don't want this to retrace all the way back up that's usually a fake out and that's when you'll usually see a move to the upside that's pretty hard so that's all that you're doing for bearish bearish trade so you're looking for down trending movements followed by not aggressive retracements I don't want it to go straight up like this right here I want it to go kind of sideways and if you have my cats meowing in the background if you guys are new to pips University I have crazy animals move candy I have crazy animals I have a freaking zoo over here I have dogs I have cats they're yelling they're ready to be out ready to go for a walk ready to go for a swim I bought them an inflatable pool which is redneck but I'm getting into my new house this week right before Thanksgiving and I don't want them swimming in my big new pool so I bought them I bought them a redneck inflatable pool that they're gonna swim in so they're ready to be out I fed them earlier ready to go for a walk since so if you hear them they're part of my family they're gonna be a part of your family as well they're in all my videos they're goofy they're hilarious and you guys will love them I'll actually do a video on them in my new house but back to trade so so hopefully you guys can see that this is this is just really smooth it's not aggressive retracement like this this is aggressive to me this is not aggressive so we have a really strong down trending move then followed by sideways movement and then we dropped again very easy trade and then we have kind of a bullish one so we have a strong bullish move to the upside followed by this sideways correction now this would be a flag pattern so if we take our trendline we spot this bullish momentum to the upside followed by a trendline and then a break so we have one point right here we have two points right here we dropped again three points we have a really nice flag pattern I'll try to label that out for you real quick you can see how it kind of looks like a flag that's where it gets its name from this should be a pop up on my screen a bit nope so strong move minor retracement and then we move to the upside again all we are doing is buying once it breaks out of that top trendline so we broke out right here and then we move to the upside very easy trade it in the way you guys can learn this is it really does look like a flag pattern so imagine stamping or stomping a pole into the ground and then you have your flag waving whatever it's a sports flag whatever flag your country flag and then the flag is waving in the wind right here once it breaks above that that's when you're buying so let's find another one pound US dollar I apparently he found that one to be pretty good let's see okay so this is one that's kind of active right now so this would be something that I'm watching I am on a 30-minute chart I was actually on the one-minute chart when I found this but 30 minute looks a little better so we have this big impulsive move to the upside that's usually how you will find the the flag patterns whether it is bullish or bearish you will see a strong move followed by the correction and you guys can use supply and demand Fibonacci like I teach the inside of pips University to give you that almost guaranteed entry for the flag pattern you guys won't have to guess if it is so make sure you guys check out pips university comm just click one of the links below this video to check out the inside on what I offer I offer over 100 training videos trade alerts are included you guys are really gonna love that and you can apply the same thing to everything that I teach hundreds of videos hundreds of previous trade alerts everything so we have that strong move followed by that retracement we have our first point of retracement drop we have our second point or a third point technically retracement right there but it would be the it would be the third point but second retracement so now all that I'm doing is I'm waiting for this to break above the this top trend line right here now I don't think this will happen yet I think since we found that rejection right there it could move to the downside which could also be just a normal counter trend line break like I said before we have a down pulse move we have a trend line in the center once it cracks this Center right there could drop to like 132 ish but the ideal way to trade this is if it closed above this red trendline is I would want it to do this I would want it to break out of this this top red line right there followed by a retracement down and then you are targeting the length of the flagpole so if it breaks out right here comes down and retest our target is the length of the flagpole and that is a hundred pips to the upside that's the easiest way to calculate your take profits so that's it's really a super simple pattern and that's how I would trade it I usually don't trade as soon as it breaks out I like to see it close above and then retest and then stall out on the trendline retest right here before going up so let's move to Australian dollar Swiss and see if I can find any more I don't know what I saw in here I outlined it Oh right there nice so you can see that this purple trend line we have this nice downtrend move we have multiple counter trend line breaks right here what cats they're driving mean I think they're hungry that's what it is okay so if you hear them messing with a bottle cap now it's because I threw it at them to make them be quiet but all right so we have this downtrend move we have a flag pattern right here as well our counter trend line break whatever another one right here I'll label them out we have one right here we have another right here so we broke out drop broke broke down and dropped and then now we have this monster one so we have this big down trending move followed by this steep correction right here and then once we close below it once we close below it we have the trend line connecting at the wicks not the not the body I like them on the wicks and once we closed below it you can see we pulled back up to it and then we drop so all you're looking for is extreme movement followed by sideways movements I'd like to see a good example so of something that would make it not too not too ideal for a retracement so here's another one right here we have this nice drop followed by a trendline right here so we have a nice drop followed by minor correction and you guys could have smoked this entry with everything that I teach on the inside of pips University you guys would have known this is going to be a monstrous sell off just by the the supply zones right here 1 points 2 points double tops right there it would have been an easy entry and but this is just a video on counter trend line breaks and flag patterns so you guys can see that we have this strong downtrend movement up trend line nice smooth trend line not an aggressive move to the upside we broke below closed and then dropped let's move on to the next one I think you guys are starting to get the idea hopefully what did I see here okay here's another one nice really nice flag pattern actually so you can see we have this nice strong move to the upside followed by our retracements three points are usually ideal so we have our monstrous move and then once we start retracing 1 points 2 points technically 3 we close just above it right there came down and retested it and then we spiked very very easy stuff this is not a hard pattern at all to learn it's one of my favorites you guys could have even done it right here which is why we have this monstrous drop-off mixed with a little bit of actually a lot of it is based on the supply zone but you could have found a nice entry with this counter trend line break right here but with everything I teach on the inside of pips University this would emit it and aways your trade and not have to guess because this was a big candlestick you would not have been able to judge that but you could have judged the entry based on this entire zone right here which is what I teach and you guys would have been in way before that trend line break so make sure you check that out let's go to the last one CAD yen hopefully this is helpful for you guys I'm trying to make it simple but it can come off is repetitive so all we're doing here is we have this nice move to the downside you could even do you could do one right here all you're doing is looking for smooth retracements after big drops so we have one point two point drop one gosh give me the trendline one point right here two points right here drop and then we start to get bullish we have one point right here followed by this we have our initial big spike sideways retracement closed above retrace move to the upside and then we're looking for this sell-off right here on the downside so we have all of this down trending movement followed by one point two points three points four points close below we're chased a little bit and then drop now if you know how to do correct risk management and your stop losses were correct if you sold it right here your bike will Nick it it spiked up on me the stop-loss is always going to be above the previous high type in forex risk management on YouTube and I should be the first video that will teach you how I do my stop losses there's many different trades that you this so here's another bullish flag pattern just practice this on a demo for a while and you guys don't have to use live money with this if this is hard that's fine you can see we have the nice initial spike followed by our minor retracement trend lines trend lines we spiked above this is where I would have entered the retest and then you get that nice move let's see if we can find any more that looked good for previous previous pics you guys could have done this one kind of an ugly one but we have we do have it and it was a fake out so we have this move to the upside followed by the downtrend breakout faked out and then spiked not a big fan and it just takes some time to get used to it'll take you tons of patterns it's not an overnight success thing and will take a lot of practice but this pattern is great and counter trend lines are amazing you guys could have done it right here we have the first initial spike 1.2 points and then we broke above almost retested it not my ideal one I would have wanted it to pull down a little bit more but it did spike we have another one right here you can see initial spike followed by the retracement closed above boom so there's a lot of there's a lot of ways that you can trade the flag pattern but I also count it as just a normal trend line break it's a very simple trade it's one of my favorites you guys can look at New Zealand dollar Swiss right now now I don't recommend this as a signal yet I would like for this to pull up just a little bit higher but you can see that we could have a counter trend line break right here so we have our first down our first down trending movement our big big spike to the downside not a spike but a breakdown followed by our little minor correction I'm not a big fan of this too much space right there which you guys learn on the inside of pips University but this is two points of a retracement so we have our first point second point then drop not a fan you really wanted as diagonal as possible so you don't want a lot of gaps in the middle you want just a smooth drop followed by minor Corrections and then drop again so here's New Zealand dollar US dollar we have one point two points we drop below came back up to retest hopefully that would still drop that looks like a pretty good one pretty ideal to teach it I'm not gonna be trading it but that's how you would trade it one points move up second point that's our valid trendline our third one we didn't really get a point I would have liked for this to pull up one more time cause that double top right here and then fall over but it looks like we got it already I would rather a double top at 68 3 though than just trading this trend line break so there's a few ways that you can trade them hopefully I wasn't too too complex it's really just looking for the sideways moves after the big drops here's another great one right here after the monstrous drop so we have a nice drop followed by that counter trend line break slash flag pattern drop to the downside very very nice right here is another one we have our first first initial drop followed by our trend line drop trend line break cool cool cool stuff I don't see any more right there pound Australian dollar will be the last one here's a baby one and they can happen happen in any size it will just take a lot of practice so we have our first initial spike followed by our our trend line held by lots of wicks very nice look so we broke out to the upside and they won't always retest maybe on the 5-minute charts they did retest oh I don't know where that went I'm gonna try to find it they don't always retest but a lot of the times they do let's move this right here and this will be the last example pound an Australian dollar you can see we had our nice move to the upside followed by our trend line break so we have one move came up almost retested right there did retested right here dropped broke below retested and then we got our spike we could be having another one right here we have a spike followed by counter trendline trade so this looks pretty good to me I may be taking this one today so that's all it is it's very simple look for the big spikes look for the minor Corrections look for the trend lines and that's how you guys trade flag patterns and trend line break so if you guys enjoyed this please use the buttons below this video and show the article on Twitter or Facebook it really helps out check the inside of pips University at pips university comm I am running a Thanksgiving and Black Friday special for a very limited time it ends very very soon click the links below to check that out and subscribe on YouTube I will see you guys on the next one hopefully this helps you out if you guys have any questions leave a comment below and I'll be happy to answer and as always I'll see you on the next one [Music]