Forex Bear Flag Patterns

Welcome to Lesson 5 of Forex Chart Formation Patterns. This lesson focuses on the bear flag pattern, a key bearish continuation signal essential for identifying ongoing downtrends.

What is a Bear Flag Pattern?

The bear flag pattern forms after a sharp price decline, referred to as the flagpole. Following this drop, the market enters a brief period of consolidation — the flag — which appears as a small upward-sloping channel or a rectangle. This formation signals a pause before the downtrend resumes.

Key characteristics of a bear flag:

Flagpole: A steep and rapid decline in price
Flag: A retracement forming a parallel channel or slight uptrend
Breakout: A continuation downward past the flag's lower boundary

This structure visually reflects a temporary counter-trend move before sellers regain control.

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