Bull Flag Pattern on a Live Gold Chart

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 "Bullish Flag" label at the top of the pole, 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 low to swing high before the flag. The flag is the next four swings: a high, a low, a high and a low. 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 lowest point fell 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); the flag runs flat or downward, never up 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 above the upper line. Target: that line’s price at the breakout candle plus the pole length. Failure level: the pole’s high minus the Pullback limit share of the pole. If a low crosses it before a close above 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 fall 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

The common view of a bull flag is a pause inside an up move: buyers pushed price up fast, sellers gave back a little, and a close above the flag shows buyers in charge again. The target is the pole copied up from the break.

Imagine, with invented figures, that the pole rises from 100 to 120 and the flag’s upper line is at 116 when a candle closes over it. The pole is 20, so the target is 136. A stop under the flag’s low at 112 risks 4 for a 20 move to the target, the kind of ratio people check first.

When it misleads

The rules ask for a fast pole and a flag no more than half as tall, so slow trends and wide pullbacks are skipped on purpose. In a choppy market you can still get flags that are just noise between 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

What is the difference between a bull flag and a bullish pennant?

Both follow a sharp rise. A flag drifts down in two parallel lines; a pennant squeezes into converging lines, ending narrower than 80% of its start. Each has its own indicator.

Where is the bull flag target placed?

One pole length above the point where the breakout candle closes over the upper flag line.

How many candles should a flag take?

There is no fixed length. The only timing rule is that the pole may take no more than 1.5 times as many candles as the flag, so a fast pole needs a flag at least two-thirds as long.

What does Flag line parallelism do on a bull flag?

It sets how far from parallel the flag lines may be. At 15 the gap between them can change by up to 15% of the flag’s starting height over its length.

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