Although Bull Flag is a trend line, it is used to point to support levels and the direction of price action. So you could say that Bull Flag is actually a step along the way.
If you know when to use this signal, you are able to make trades based on a signal that you get from a market maker or technical analyst. Bear Flag on the other hand, is a trend line that goes up on a sideways price action. Because of the direction of price movement, you can not rely on the Direction of Bull Flag Line.
The technical indicators that you can use for this are called small triangles. These are technical indicators that you can use as short-term support or resistance. You could say that a support is being achieved and the price is now moving up a little bit but not reaching a new high.
A resistance is when a price is just about to pass the trend line but not very far. With Bull Flag and Bear Flag, we can see that the upward trend is just starting to slow down, so the Bull Flag is the first resistance. As the price moves up, it will find a little support at the Bull Flag and then the price will continue to move up.
Now the next part of the chart that is important to look at is the area between the small triangles and the price. When a buyer is attracted to a strong trend and the market is just about to reach its highest point, it could move up even faster. This is because the momentum is still there and buyers don’t want to miss out on such a profitable trade.
When bulls are trading, they have the advantage because they can get even more profit in this way. But you still need to make sure that you are getting in early before the bulls can react and start to sell. You can’t just make all the profits if you’re buying when the bulls are about to hit their peak.
When the bulls are selling, they could even stop the prices to fall back and buy. But you should be aware that this is not a very long term trade and will go down after the price has gone up. So you may have to wait a little longer to get the profits.
For most traders, Bull Flag would not be one of the indicators that they would use to trade. It has a slight tendency to run sideways. Sometimes the price could be on the downward trend and at other times, it could be moving up.
Both bulls and bears have their respective advantages and disadvantages. So you must be aware of these points when trading. Also, since the indicators are meant to help you judge the direction of trend change, you need to be aware of the different types of indicators.
In this case, the same indicator that the bulls would use would be the bears’ weakness. If the bulls were to be the price has reached a resistance or a higher level of the range, then the bears could be trading downwards. So, in terms of time frame, this is a positive indicator.
With Bull Flag and Bear Flag, they are not positive indications. So you could say that in order to predict the future trend, you need to be a little bit of an expert. You can learn to recognize the signs by reading technical charts.
Some traders like to use this because of the bulls’ strength. The bulls may be on the way down or they may have taken off their support level, but in the end, Bull Flag and Bear Flag are still pointing to support levels which allow bulls to make profits.