Bear Flag Pattern: Rules, Target and Live Gold

What it shows

The pole and the four flag swings as one coloured line, the two flag lines with a light fill between them, a "Bearish Flag" label at the top of the pole’s end, and after the breakout a dotted target line ending in a Target label.

How Pravex works it out

1. Pravex searches only the last 600 candles. A candle is a swing high when its high is above the 5 candles before it and not below the 5 candles after it (a swing low mirrors that). A swing is therefore known only 5 candles after it happened. Highs and lows are then put in strict alternation: of two highs in a row (or two lows) only the more extreme one stays.
2. The pole is the last swing high to swing low before the flag. The flag is the next four swings: a low, a high, a low and a high. The upper line joins the first and last flag highs, the lower line joins the first and last flag lows.
3. It is a flag only if: the pole is at least twice the flag’s height at its start; the pole took no more than 1.5 times as many candles as the flag; the flag’s highest point climbed back no more than the Pullback limit share of the pole; the lines are parallel (their gap may change by no more than the Flag line parallelism share of the starting height over the flag’s length); and the flag runs flat or upward, never down along with the pole; and no close pokes beyond the lines by more than 2% of the flag’s end height.
4. Breakout: the first candle that closes below the lower line. Target: that line’s price at the breakout candle minus the pole length. Failure level: the pole’s low plus the Pullback limit share of the pole. If a high crosses it before a close under the line, the shape is dropped.
5. Status after the breakout: Awaiting while the target is untouched and the failure level holds, Reached when a candle’s high (or low) touches the target, Failed when price crosses the failure level first, Indefinable when both happen on the same candle.

Settings

Setting	Default	What changing it does
Which patterns to keep	All	Which found patterns stay on the chart. All keeps every one. Awaiting and Reached drops Failed and Indefinable ones. Only Awaiting keeps patterns whose target is not yet touched and that have not failed. Last Awaiting keeps only the single newest Awaiting pattern.
Where targets are drawn	Only Awaiting	Which dotted target lines and Target labels are drawn: All, Only Awaiting, Awaiting and Reached, or None. It hides the target only; the pattern itself stays as long as the pattern filter keeps it.
Flag line parallelism	15	How far from parallel the two flag lines may be, as a percent of the flag’s starting height. Raise it and tilted, wedge-like flags qualify; at 0 only perfectly parallel lines pass.
Pullback limit	50	How far the flag may climb back into the pole, as a percent of the pole. It limits the flag when the shape is searched and also sets the failure level after the breakout.
Show unconfirmed patterns	off	Off: a pattern appears only after a candle has closed through its breakout line. On: patterns that have not broken out yet are drawn too, with the last leg dotted and the target they would have. The last swing is then the running extreme since the previous confirmed swing, so it moves with every candle.

How traders read it

A bear flag is usually taken as a pause inside a down move: sellers took price down fast, buyers bounced it weakly, and the next close under the flag shows the sellers back in control. The target is the pole copied down from the break.

Numbers made up for the example: the pole falls from 120 to 100 and the flag’s lower line is at 104 when a candle closes under it. The pole is 20, so the target is 84. If the stop would sit above the flag’s top at 108, the room to the target is 20 against 4 of risk, which is the kind of check people run before taking a flag.

When it misleads

A flag needs a clean fast move first; in a slow grind lower the pole rule (pole at least twice the flag’s height) rejects most candidates, and in a choppy market you will find flags that are just noise between two swings. Patterns are built from confirmed swings only, so nothing is drawn on a swing that is still forming. Two things can still change after the fact. A later, more extreme swing of the same kind replaces the earlier one, and a pattern that ended on it shifts or disappears. And the breakout is judged on a candle’s close, which on the newest open candle can still move back inside. With unconfirmed patterns shown, the last point is the running extreme and moves with every candle.

Questions and answers

How does Pravex tell a bear flag from a bearish pennant?

Both start with a sharp fall. In a flag the two lines stay parallel and drift flat or up; in a pennant they converge, with the end narrower than 80% of the start. Each has its own indicator.

Where is the bear flag target placed?

One pole length below the point where the breakout candle closes under the lower flag line, not below the line’s value at the end of the flag.

Can a bear flag still fail after it is drawn?

Yes. After the break, if a high reaches the failure level (the pole’s low plus the Pullback limit share of the pole), the status turns Failed. Choose a stricter option under Which patterns to keep to hide those.

What does Pullback limit do on a bear flag?

It caps how far the flag may retrace into the pole (50 means up to half of it) and doubles as the failure level once the pattern has broken out.

Related: Bullish Flag Chart Pattern, Bearish Pennant Chart Pattern, Rectangle Chart Pattern, All Chart Patterns, every indicator.