The Bear Flag: Your Secret Weapon for Profitable Short Trades

There is a pattern that many traders take advantage of when the market panics: the bearish flag. It’s not complicated, but it requires discipline.

How Is This Pattern Formed?

Four well-defined phases:

The Lance: An abrupt drop with strong volume. Panic sells massively.

The Flag: Then comes a pause. The price bounces slightly or remains sideways, with decreasing volume.

The Break: The price falls below the support of the flag with high volume. That’s when sellers act again.

Trading Like a Professional

Entry: Wait for the price to break the lower support of the flag. No FOMO before the breakout.

Stop-Loss: Place it just above the top of the flag. Make it precise, without excessive margin.

Profit Target: Here’s the trick. Measure the height of the lance (how much it dropped in the first phase). That will be approximately your additional drop target after the break.

Practical example: If BTC dropped $2,000 in the first move and then formed the flag, expect a similar drop after the break.

Why Does It Work So Well?

It’s one of the most reliable patterns because the initial lance shows strong selling intent. The flag is just a pause. When it resumes, it resumes strongly.

Use it in crypto, stocks, forex. The market respects this pattern everywhere.