{"id":60490,"date":"2012-08-29T11:00:16","date_gmt":"2012-08-29T01:00:16","guid":{"rendered":"http:\/\/www.fnarena.com\/index.php\/2012\/08\/29\/how-to-trade-a-bearish-flag-pattern\/"},"modified":"2012-08-29T11:00:16","modified_gmt":"2012-08-29T01:00:16","slug":"how-to-trade-a-bearish-flag-pattern","status":"publish","type":"post","link":"https:\/\/staging.fnarena.com\/index.php\/2012\/08\/29\/how-to-trade-a-bearish-flag-pattern\/","title":{"rendered":"How To Trade A Bearish Flag Pattern"},"content":{"rendered":"

\n\tBy Walker England, Trading Instructor, FXCM<\/span><\/p>\n

\n\tTechnical analysis allows for the study of a variety of different trading patterns to assist traders timing their entries and exits. One of the most useful patterns in a trending market environment is used to spot continuations in price. Today we will look at identifying and trading the bear flag pattern in an established down trend.<\/p>\n

\n\t\"\"<\/p>\n

\n\tIdentifying the Pattern<\/strong><\/p>\n

\n\tIdentifying a bear flag can be easy once you know what you’re looking for. The pattern itself is divided into three parts. First we need to find the flag pole which will be identified as our initial decline. This decline can be steep or slowly sloping and will establish the basis for our trend. Next we have the flag itself. This is identified as a period of consolidation after the completion of prices initial decline. During this period, prices may slowly channel upward and retrace a portion of the initial move. At this point traders will wait for price to break to lower lows in the direction of the trend.<\/p>\n

\n\tAfter price begins to move lower again, we can then find the final component needed for trading a bearish flag pattern. The profit target is a potential value to take profit after a currency pair’s next decline in price. This pricing level can be identified by first measuring the distance in pips of our initial decline. This value can then be subtracted from the peak resistance line formed from our consolidating flag. Now that we know what we are looking for, let’s look at an example in today’s market.<\/p>\n

\n\t\"\"<\/p>\n

\n\tEURJPY<\/span> Current Price<\/strong><\/p>\n

\n\tAbove we can begin to see the potential of a bearish flag pattern being created on the EURJPY<\/span> daily chart. The flag pole has been established by connecting the June 21st<\/span> high at 101.61 with the July 24th<\/span> low at 94.10. Totaling the difference between these points culminates in an initial decline of 751 pips. Currently price is in the consolidation phase of the pattern. As price gradually rises, we can see the flag pattern take shape. It’s important to note that we won’t be sure that we have an established bearish flag pattern until price breaks out to lower lows. At that point, we can use our 751 pip initial decline to establish potential price targets near 91.00.<\/p>\n

\n\t—Written by Walker England, Trading Instructor<\/p>\n

\tThe views expressed are not FNArena's<\/span> (see our disclaimer).<\/p>\n

\n\tFor real time news and analysis, please visit http:\/\/www.dailyfx.com\/real_time_news<\/p>\n

\n\tDailyFX<\/span> provides forex<\/span> news on the economic reports and political events that influence the currency market. Learn currency trading with a free practice account and charts from FXCM<\/span>.<\/p>\n

\n\twww.dailyfx.com<\/p>\n

\n\tDisclaimer<\/strong><\/em><\/p>\n

\n\tForex<\/span> Capital Markets is headquartered at Financial Square 32 Old Slip, 10th<\/span> Floor, New York, NY 10005 USA.<\/u><\/em><\/p>\n

\n\tTrading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before you decide to trade the foreign exchange products offered by Forex<\/span> Capital Markets, LLC, Forex<\/span> Capital Markets Limited, inclusive of all EU branches, FXCM<\/span> Asia Limited, or FXCM<\/span> Australia Limited, any affiliates of aforementioned firms, or other firms under the FXCM<\/span> group of companies [collectively “FXCM<\/span><\/span> Group”] you should carefully consider your objectives, financial situation, needs and level of experience. If you decide to trade foreign exchange products offered by FXCM<\/span> Australia Limited you must read and understand the Financial Services Guide and the Product Disclosure Statement. FXCM<\/span> Group may provide general market information and commentary which is not intended to be investment advice and the content of this email must not be construed as personal advice. By trading, you could sustain a total loss of your deposited funds and therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading in foreign exchange products. Foreign exchange products are only suitable for those customers who fully understand the market risk. FXCM<\/span> recommends you seek advice from a separate financial advisor.<\/em><\/p>\n

\n\tFXCM<\/span> Group assumes no liability for errors, inaccuracies or omissions in these materials and does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. FXCM<\/span> Group shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. This email is not a solicitation to buy or sell currency. All information contained in this e-mail is strictly confidential and is only intended for use by the recipient. All e-mail sent to or from this address will be received by the FXCM<\/span> corporate e-mail system and is subject to archival and review by someone other than the recipient.”<\/em><\/p>\n

\n\tTechnical limitations<\/strong><\/p>\n

\n\tIf you are reading this story through a third party distribution channel and you cannot see charts included<\/span>, we apologise<\/span>, but technical limitations are to blame.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

Market analysts at FXCM show how to identify a bearish flag pattern and how such a pattern can be used by traders.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60490"}],"collection":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/comments?post=60490"}],"version-history":[{"count":0,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/posts\/60490\/revisions"}],"wp:attachment":[{"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/media?parent=60490"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/categories?post=60490"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/staging.fnarena.com\/index.php\/wp-json\/wp\/v2\/tags?post=60490"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}