The Bear Flag is a classic bearish continuation pattern. It forms after a strong downward impulse (the flagpole), followed by a controlled rebound (the flag), and resolves with a breakdown continuation.
Quick Summary
- Type: Continuation
- Best context: Downtrend + weak corrective rebound
- Confirmation: Clean close below flag support (retest is a plus)
- Invalidation: Reclaim above flag high / last swing high
What Is a Bear Flag?
A bear flag forms when sellers push price sharply lower, then price consolidates in a tight rebound or channel. If selling pressure remains dominant, price breaks below the flag support and continues lower.
Bear Flag Structure (Flagpole + Flag)
- Flagpole: Strong impulsive sell-off with momentum.
- Flag: Short, controlled rebound (often slightly upward-sloping).
- Breakdown: Clean close below flag support.
Market Context: When Bear Flags Work Best
- Downtrend first: Lower highs + lower lows on the higher timeframe.
- Weak rebound: The flag should look corrective, not impulsive.
- Clear levels: Well-defined support to break and invalidation above the flag high.
- Optional confluence: Prior support turned resistance, key resistance zone, or EMA area.
How to Trade a Bear Flag
Entry Option A (Safer): Breakdown Close
- Wait for a candle close below flag support.
- Avoid entering on wick-only breakdowns.
Entry Option B (Often Better R:R): Breakdown + Retest
- After the breakdown, wait for a retest of the broken support as resistance.
- Enter after bearish confirmation (rejection candle, bearish engulfing, etc.).
Stop-Loss (Invalidation)
- Standard SL: Above the flag high / last swing high.
- Tight SL: Above the retest level (better R:R, higher stop-out risk).
Targets (Take Profit)
- TP1: 1R (consider partial profits).
- TP2: Next major support zone.
- Measured move: Flagpole height projected from the breakdown (guide only).
Common Bear Flag Failures
- Fake breakdown: Wick below support but close back inside the flag.
- Strong reclaim: Price reclaims the flag and holds above it.
- Context shift: Market turns risk-on during the setup.
- News spikes: High-impact news invalidates structure.
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Disclaimer: Educational content only. No financial advice. Trading involves risk. Always manage risk and do your own research.
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