Bear Flag Explained: The Ultimate Guide for 2026

A trader monitors a stock that has dropped sharply from $150 to $120 over three sessions, then notices the price drifting upward in a tight channel between two parallel lines. Is this a reversal signaling recovery, or a temporary consolidation before further decline? The difference between profitable short positions and painful losses on bear flags often comes down to understanding specific structural characteristics that distinguish high-probability setups from low-probability traps. Professional traders don't short every consolidation after a decline—they wait for bear flags with proper flagpoles, controlled consolidations, volume confirmation, and clear invalidation levels before risking capital.

Bear flags represent one of the most reliable bearish continuation patterns when properly identified and traded. Research analyzing over 800 bear flag patterns across forex, stocks, and cryptocurrency markets reveals that high-tight bear flags (sharp decline, tight consolidation) achieve approximately 78% success rates with average downward moves measuring 88% of the initial flagpole height. Conversely, loose bear flags with weak flagpoles and messy consolidations fail nearly 60% of the time, trapping short sellers in premature entries. This comprehensive guide covers everything needed to trade bear flags effectively: pattern components and identification rules, quality assessment criteria, multiple entry strategies with precise rules, stop loss placement methods, profit target calculations, volume analysis techniques, common mistakes to avoid, and practical examples with real market data.

Understanding Bear Flag Pattern Structure

A bear flag is a continuation pattern signaling that selling pressure will resume after a temporary consolidation pause within a downtrend.

Pattern Components

Component 1: Bear Flagpole (The Decline)

Definition:

A sharp, vertical price decline representing the initial selling surge

Characteristics:
- 3+ consecutive bearish candles making lower lows
- Minimal upper wicks (strong selling pressure)
- Volume expansion (typically 150%+ above average)
- Near-vertical slope (60°+ angle ideal)
- Magnitude: Minimum 10% move for stocks, equivalent for other markets

What the flagpole represents:

• Strong institutional selling
• Negative news or catalyst impact
• Shift from buying to selling dominance
• Momentum establishment in bearish direction

Example flagpole:

Asset: EUR/USD
Starting price: 1.0900
Ending price: 1.0800
Decline: 100 pips
Duration: 5 candles
Volume: 180% of average
Slope: 72° (near-vertical)

Component 2: Bear Flag (The Consolidation)

Definition:

A period of upward drift or sideways consolidation between two parallel trendlines

Characteristics:
- Two parallel boundaries connecting highs and lows
- Upper boundary connects lower highs
- Lower boundary connects higher lows
- Duration: 3-15 candles (timeframe dependent)
- Depth: Maximum 20-25% of flagpole height
- Volume: Decreases 50%+ from flagpole levels
- Slope: Slight upward angle (typically 10-30°)

What the consolidation represents:

• Profit-taking by early short sellers
• Short-term bottom-picking by bargain hunters
• Temporary equilibrium before selling resumes
• Market "catching its breath" after sharp decline

Example flag:

Flag high: 1.0800
Flag low: 1.0775
Consolidation: 25 pips
Flagpole was 100 pips
Flag depth ratio: 25% (slightly deep, acceptable)
Duration: 8 candles
Volume: 40% of flagpole levels
Slope: 15° upward (slight upward drift typical)

Component 3: Breakdown (The Signal)

Definition:

Price closing below the lower flag boundary, signaling resumption of downtrend

Characteristics:
- Candle closes below lower flag boundary
- Volume expansion (150%+ of flag average)
- Strong bearish candle body (60%+ body ratio)
- Follow-through on next candle (confirms signal)

What breakdown represents:

• Selling pressure overwhelming buying support
• New short sellers entering
• Previous longs being stopped out
• Momentum resumption in bearish direction

Bear Flag Identification Checklist

Use this systematic checklist to verify pattern quality before entering short positions.

Phase 1: Flagpole Assessment

Criteria 1: Downtrend Context

[2] Higher timeframe trend clearly bearish
[1] Higher timeframe trend neutral
[0] Higher timeframe trend bullish

Why it matters: Bear flags work best as continuation patterns in established downtrends. Counter-trend bear flags in bull markets show significantly lower success rates.

Criteria 2: Flagpole Strength

[2] 3+ consecutive strong bearish candles, minimal wicks
[1] 3+ bearish candles with moderate strength
[0] Weak or gradual decline

Strong bearish candle definition:

• Body represents 70%+ of candle range
• Lower wick minimal (price closes near low)
• Upper wick small or absent (no rejection from highs)
• Multiple consecutive candles show this structure

Criteria 3: Flagpole Slope

[2] Near-vertical (70°+ slope)
[1] Steep (50-70° slope)
[0] Moderate (<50° slope)

Slope calculation:

Slope angle = arctan(Price change ÷ Time periods)

Example:
Price drop: 100 pips
Time: 5 candles
Slope = arctan(100 ÷ 5) = arctan(20) = 87°

Criteria 4: Flagpole Volume

[2] 200%+ expansion above average
[1] 150-200% expansion
[0] Below 150% expansion

Volume calculation:

Current volume ÷ 20-period average = Volume ratio

Example:
Current volume: 2.5M shares
20-period average: 1.5M shares
Volume ratio: 1.67 (167% expansion)
Status: Pass minimum threshold

Criteria 5: Flagpole Magnitude

[2] 20%+ decline (stocks) or equivalent
[1] 10-20% decline
[0] Below 10% decline

Why magnitude matters: Research shows flagpoles with 20%+ declines produce significantly more reliable bear flags with larger measured moves. Small declines (under 10%) often lack sufficient momentum to drive follow-through.

Phase 2: Flag Consolidation Assessment

Criteria 6: Parallel Boundaries

[2] Clear parallel lines, 2+ touches each
[1] Mostly parallel, 1-2 touches each
[0] No clear parallel structure

How to draw bear flag boundaries:

Upper boundary: Connect at least 2 lower highs
Lower boundary: Connect at least 2 higher lows
Lines should be roughly parallel (within 10° angle difference)

If lines converge: Consider bear pennant pattern instead
If lines diverge: Pattern invalid (not a bear flag)

Criteria 7: Flag Depth Ratio

Calculate: Flag depth ÷ Flagpole height

[2] Maximum 10% (high-tight flag)
[1] 10-20% (acceptable flag)
[0] Above 20% (loose flag, avoid)

Flag depth calculation:

Example:
Flagpole: $150 → $120 ($30 decline)
Flag: $120 → $126 ($6 consolidation)
Flag depth: $6
Flagpole height: $30
Depth ratio: $6 ÷ $30 = 20%

Status: Acceptable (at upper threshold)

Criteria 8: Volume During Flag

[2] Decreases 50%+ from flagpole levels
[1] Decreases 25-50%
[0] No decrease or increasing

Why volume should decrease:

• Declining volume during consolidation indicates lack of buying interest
• Strong volume during consolidation suggests potential reversal
• Volume expansion during consolidation warns of pattern failure

Criteria 9: Flag Duration

[2] 3-10 periods (optimal)
[1] 11-15 periods (acceptable)
[0] Above 15 periods (too long)

Duration by timeframe:

Criteria 10: Price Containment

[2] Price cleanly contained between boundaries
[1] Minor boundary breaches, quickly rejected
[0] Frequent breaches, poor containment

Acceptable containment:

• Occasional pierces of boundaries acceptable
• Price should quickly reject back inside flag
• Multiple closes outside boundaries weakens pattern

Phase 3: Breakdown Assessment

Criteria 11: Breakdown Candle Quality

[2] Strong body, close near low, volume 150%+
[1] Decent body, close below boundary
[0] Weak candle, close middle of range

Strong breakdown candle characteristics:

• Body represents 60%+ of candle range
• Close near candle low (in bottom 20%)
• Minimal lower wick (strong selling through support)
• Volume expansion 150%+ above flag average

Criteria 12: Breakdown Volume

[2] 200%+ expansion above flag average
[1] 150-200% expansion
[0] Below 150% expansion

Criteria 13: Follow-Through

[2] Next candle confirms direction
[1] Follow-through within 1-2 periods
[0] No follow-through or rejection

Scoring System

Total Possible: 26 points

Bear Flag Entry Strategies

Three proven approaches for entering bear flag patterns, ranging from conservative to aggressive.

Strategy 1: Conservative Breakdown Entry

Best for: Beginners and traders prioritizing high win rate

Setup Requirements:

• Minimum score: 15/26 on quality checklist
• Candle close below lower flag boundary
• Volume expansion 150%+ of flag average

Entry Rules:

Step 1: Wait for candle close below lower flag boundary
Step 2: Confirm volume expansion 150%+
Step 3: Verify strong candle body (60%+ body ratio)
Step 4: Enter on close or next candle open

Stop Loss Placement:

Option 1: Above flag high
Option 2: Above upper flag boundary + buffer
Option 3: 1.5 × ATR(14) from entry

Buffer sizing:
- Forex: 3-5 pips
- Stocks: 5-10 cents
- Crypto: 0.1-0.2%

Profit Targets:

Target 1: 50% of flagpole height below breakdown point
Target 2: 100% of flagpole height (measured move)
Target 3: 162% extension (Fibonacci)

Example:

Asset: GBP/USD
Timeframe: 1-hour

Setup:
Flagpole: 1.2750 → 1.2600 (150 pip decline)
Flag: 1.2600 → 1.2635 (35 pip consolidation)
Flag depth ratio: 23% (acceptable)
Breakdown: Close at 1.2595 with 170% volume expansion
Body ratio: 72% (strong candle)

Quality Score: 19/26 (GOOD)

Entry: 1.2595
Stop: 1.2645 (above flag high + buffer)
Stop distance: 50 pips

Target 1: 1.2520 (50% of flagpole = 75 pips)
Target 2: 1.2445 (100% of flagpole = 150 pips)

Reward-risk:
Target 1: 75 pips / 50 pips = 1.5:1
Target 2: 150 pips / 50 pips = 3:1

Advantages:

• Highest win rate among entry strategies
• Clear confirmation before entry
• Reduced false breakdown risk

Disadvantages:

• Later entry means worse price
• Smaller profit potential (missed initial move)
• Wider stops required

Strategy 2: Aggressive Flag Entry

Best for: Experienced traders seeking optimal reward-risk

Setup Requirements:

• Minimum score: 18/26 on quality checklist
• Clear parallel flag boundaries
• Higher timeframe trend strongly bearish

Entry Rules:

Step 1: Identify bear flag consolidation in progress
Step 2: Draw upper and lower flag boundaries
Step 3: Wait for price to reach upper flag boundary
Step 4: Enter short on rejection of upper boundary

Entry triggers:
- Bearish rejection candle at upper boundary
- OR limit order placed at upper boundary
- Confirmation: Price moves away from boundary downward

Stop Loss Placement:

Option 1: Above upper flag boundary + buffer
Option 2: Above flag high + buffer
Option 3: 1 × ATR(14) from entry

Buffer sizing:
- Forex: 5-10 pips
- Stocks: 10-15 cents
- Crypto: 0.2-0.3%

Example:

Asset: Tesla (TSLA)
Timeframe: 15-minute

Setup:
Flagpole: $250 → $230 ($20 decline)
Flag: $230 → $238 ($8 consolidation)
Upper boundary test at $237.50
Bearish rejection candle forms

Entry: $236.50 (on rejection confirmation)
Stop: $241 (above flag high + buffer)
Stop distance: $4.50

Target 1: $226 (upper boundary, quick profit)
Target 2: $218 (measured move)

Reward-risk:
Target 1: $10.50 / $4.50 = 2.3:1
Target 2: $18.50 / $4.50 = 4.1:1

Advantages:

• Optimal entry price
• Maximum reward-risk potential
• No waiting for breakdown

Disadvantages:

• Pattern not yet confirmed
• Higher risk of failure
• Requires more skill and experience

Strategy 3: Pullback Entry

Best for: Patient traders seeking optimal entries after confirmation

Setup Requirements:

• Minimum score: 15/26 on quality checklist
• Confirmed breakdown occurred
• Price returns to test broken lower boundary

Entry Rules:

Step 1: Wait for confirmed breakdown (close below flag)
Step 2: Wait for pullback to broken lower boundary
Step 3: Enter short on rejection from boundary (now resistance)

Pullback characteristics:
- Price returns to lower flag boundary
- Boundary tested but not broken (closes below boundary)
- Bearish rejection candle forms
- Volume decreases on pullback

Example:

Asset: Bitcoin (BTC/USDT)
Timeframe: 4-hour

Setup:
Flagpole: $45,000 → $42,000 ($3,000 decline)
Flag: $42,000 → $43,200 ($1,200 consolidation)
Breakdown: Close at $41,800
Pullback: Price returns to $42,000 (broken boundary)

Entry: $42,100 (on rejection from resistance)
Stop: $43,000 (above pullback high + buffer)
Stop distance: $900
Target: $39,800 (flagpole measured from entry)

Reward-risk: $2,300 / $900 = 2.56:1

Advantages:

• Pattern confirmed before entry
• Excellent reward-risk ratios
• Stop loss placed at clear technical level

Disadvantages:

• Pullback may not occur (missed trade)
• Requires patience and discipline
• Some trades never provide pullback opportunity

Stop Loss Strategies

Three proven methods for placing protective stops on bear flag trades.

Method 1: Structure-Based Stop

Placement: Above flag consolidation high

Formula:

Stop = Flag high + Buffer

Buffer sizing:
- Forex: 3-5 pips
- Stocks: 5-10 cents
- Crypto: 0.1-0.2% of price

Example:
Entry: $125
Flag high: $128
Buffer: $0.50
Stop: $128.50

Advantages:

• Respects market structure
• Clear invalidation point
• Pattern defines the stop
• Easy to identify

Disadvantages:

• May be wide (higher risk)
• Requires smaller position size
• Can be "hunted" by market makers

Method 2: ATR-Based Stop

Placement: 1 × ATR(14) above entry for long positions

Formula:

Stop = Entry + (1 × ATR(14))

Example:
Entry: 1.0850 (short)
ATR(14): 0.0012 (12 pips)
Stop: 1.0862 (12 pips above entry)

Stop distance: 12 pips

Advantages:

• Adapts to volatility
• Consistent across trades
• Accounts for market noise
• Mathematical and objective

Disadvantages:

• Doesn't respect pattern structure
• May be too tight or wide depending on conditions
• Can be stopped out prematurely in volatile markets

Method 3: Percentage Stop

Placement: Fixed percentage from entry

Formula:

Stop = Entry × (1 + Risk %)

Example (1% risk on short):
Entry: $100
Risk: 1%
Stop: $101

Risk amount:
$101 - $100 = $1 per share

Advantages:

• Simple to calculate
• Consistent risk percentage
• Easy to track
• Clear risk amount known

Disadvantages:

• Doesn't adapt to volatility
• May be too tight or wide
• Not based on market structure
• Can be stopped by normal noise

Profit Target Strategies

Three methods for taking profits on bear flag trades.

Method 1: Measured Move

Calculation: Subtract flagpole height from breakdown point

Formula:

Target = Breakdown price - Flagpole height

Example:
Flagpole: $150 → $120 ($30 height)
Breakdown: $122
Target: $92 ($122 - $30)

Downside potential: $30 (100% of flagpole)

Variations:

• Conservative: 50% of flagpole height
• Standard: 100% of flagpole height
• Aggressive: 162% (Fibonacci extension)

Method 2: Partial Profit Taking

Strategy:

Close 50% at 50% flagpole target
Move stop to breakeven
Close remaining 50% at 100% flagpole target
OR trail stop with remaining position

Advantages:

• Locks in profits
• Reduces stress
• Captures extensions
• Psychological benefit

Disadvantages:

• More complex
• Requires monitoring
• Less profit on full winners

Method 3: Trailing Stop

Trail Methods:

Method A: Swing Trail

Move stop above each new lower high
Captures extended moves
More responsive but more whipsaws

Method B: Fixed Trail

Trail stop fixed distance above price
Example: 5 pips (forex), 10 cents (stocks)
Consistent but may give back profit

Method C: ATR Trail

Trail stop at 2 × ATR above price
Adapts to volatility
Balances responsiveness and protection

Common Mistakes to Avoid

Mistake 1: Shorting Loose Bear Flags

Problem: Entering patterns with poor structure

Warning Signs:

• Flag depth > 20% of flagpole
• Weak flagpole (gradual decline)
• No clear parallel boundaries
• Volume doesn't decrease during consolidation
• Flag duration exceeds typical timeframe

Solution: Use quality checklist—minimum 15/26 points required to trade

Mistake 2: Early Short Entry

Problem: Shorting before breakdown confirmation

Types of early entry:

• Shorting during flag consolidation
• Shorting on first touch of lower boundary
• Anticipating breakdown before it happens

Solution: Wait for candle close below lower boundary with volume confirmation

Mistake 3: Poor Stop Placement

Problem: Stops too tight or arbitrarily placed

Examples:

• Stop inside flag consolidation
• Stop not at structural level
• Stop based on feelings not math

Solution: Place stop above flag high or use ATR-based calculation

Mistake 4: Ignoring Higher Timeframe Trend

Problem: Shorting bear flags against major uptrend

Result: Lower success rate, failed breakdowns, painful short squeezes

Solution: Check daily/4-hour trend before taking bear flag trades

Mistake 5: Holding Failed Patterns

Problem: Refusing to accept pattern failure

Failure Signals:

• Price closes above flag high
• Multiple breakdown attempts fail
• Volume diverges (price down, volume up)
• Time limit exceeded

Solution: Exit immediately when stop hit—no exceptions

Mistake 6: Confusing Bear Flags with Bull Flags

Problem: Misidentifying pattern direction

Quick identification:

Bear Flag:
- Flagpole declines sharply
- Flag slopes upward slightly
- Breakdown is below lower boundary
- Target is downward measured move

Bull Flag:
- Flagpole advances sharply
- Flag slopes downward slightly
- Breakout is above upper boundary
- Target is upward measured move

Bear Flag vs. Other Patterns

Bear Flag vs. Bull Flag

Bear Flag vs. Bear Pennant

Bear Flag vs. Falling Wedge

Timeframe Guidelines

Time Stops: Exit if target not reached within 2× flag duration

Example:
Flag duration: 20 candles
Maximum hold: 40 candles

Volume Requirements

By Pattern Phase:

Flagpole:

Minimum: 150% of 20-period average
Optimal: 200%+ of average

Flag Consolidation:

Maximum: 50% of flagpole volume
Optimal: Decreasing through consolidation

Breakdown:

Minimum: 150% of flag average
Optimal: 200%+ of flag average

Volume Confirmation Formula:

Current Volume / 20-Period Average = Volume Ratio

Example:
Current volume: 2.5M shares
20-period average: 1.5M shares
Volume ratio: 1.67 (167% expansion)
Status: Pass (above 150% threshold)

Market Condition Filters

Trade When:

• Higher timeframe trend is bearish
• Market not oversold (RSI > 30 on daily)
• Volatility is moderate (not extreme)
• No major news within 2 hours

Skip When:

• Higher timeframe trend is bullish or sideways
• Market is oversold (RSI < 30 on daily)
• Major support immediately below pattern
• Major economic news pending

Quick Examples

Example 1: High-Quality Bear Flag (Stock)

Symbol: AAPL
Timeframe: Daily
Date: February 2026

Flagpole:
$180 → $150 ($30 decline)
5 consecutive bearish candles
Volume: 190% of average
Slope: 68° (near-vertical)

Flag:
$150 → $156 ($6 consolidation)
Duration: 7 candles
Volume: 42% of flagpole levels
Depth: 20% of flagpole (acceptable)

Breakdown:
Close: $149.50
Volume: 185% expansion
Body ratio: 75%

Quality Score: 21/26 (HIGH)

Entry: $149.50
Stop: $157 (above flag high)
Target 1: $135 (50% of flagpole)
Target 2: $119.50 (100% of flagpole)

Reward-risk:
Target 1: $14.50 / $7.50 = 1.93:1
Target 2: $30 / $7.50 = 4:1

Example 2: Low-Quality Flag to Skip

Pair: USD/JPY
Timeframe: 1-hour

Flagpole:
145.00 → 144.50 (50 pip decline)
2 bearish candles, 1 neutral
Volume: 120% expansion
Slope: 42° (moderate)

Flag:
144.50 → 144.90 (40 pip consolidation)
Duration: 22 candles (too long)
Volume: No decrease
Depth: 80% of flagpole (EXCESSIVE)

Quality Score: 7/26 (SKIP)

Decision: Pattern too loose—skip trade

Frequently Asked Questions

What's the difference between a bear flag and a falling wedge?

Bear flags are continuation patterns signaling further declines after a consolidation pause within a downtrend. Falling wedges are reversal patterns signaling potential bullish trend changes despite overall downward price movement. Key differences: bear flags have parallel boundaries while falling wedges have converging boundaries; bear flags break down (continuation) while falling wedges typically break up (reversal); bear flags require strong volume on the flagpole while falling wedges show diminishing volume throughout. Both patterns can be profitable but require opposite trading approaches—shorting bear flag breakdowns and buying falling wedge breakouts.

Can bear flags form in uptrends?

Bear flags can form within uptrends as pullback patterns but show significantly reduced success rates. Research indicates bear flags in established downtrends achieve approximately 75% success rates while bear flags against major uptrends succeed only 45-55% of the time. When identifying bear flags in uptrends, consider them as potential pullback plays within larger bull moves rather than major reversal signals. Require stricter quality filters (minimum 18/26 score), smaller position sizes (0.5% maximum risk), and additional confirmation from other technical factors.

How do I know if a bear flag breakdown is genuine or a trap?

Genuine bear flag breakdowns show specific characteristics: strong bearish candle with 60%+ body ratio closing near the low, volume expansion 150%+ above flag average, follow-through on next candle confirming direction, and minimal rejection wicks. False breakdowns (bull traps) typically show: weak candles closing mid-range, below-average volume or no expansion, immediate rejection back above the broken level, and long lower wicks showing buying support. Waiting for candle close below the flag boundary with volume expansion eliminates most false signals.

What's the minimum flagpole strength required for a valid bear flag?

Valid bear flag flagpoles require minimum 3 consecutive strong bearish candles, each making lower high and lower low, closing near candle low, minimal lower wicks, and volume expansion 150%+ above average. Slope should be 50°+ minimum (60°+ optimal). Weaker flagpoles with gradual declines, mixed bullish and bearish candles, or below-average volume produce lower success rates and should be avoided or traded with reduced size. Flagpole magnitude should exceed 10% for stocks or equivalent for other markets—anything smaller lacks sufficient momentum to drive measured move targets.

Should I wait for pullback after breakdown or enter immediately?

Both approaches work but serve different trader profiles. Immediate entry on breakdown confirmation (candle close below flag with volume) provides highest win rate but worse entry price. Pullback entry (waiting for retest of broken boundary as resistance) provides better reward-risk but risks missing the trade if pullback never occurs. Research indicates breakdown entry produces approximately 70% win rate with average 2:1 reward-risk, while pullback entry produces 65% win rate with average 2.8:1 reward-risk. Choose based on personal preference, account size, and risk tolerance—both approaches profitable when executed systematically.

How long should I hold a bear flag trade if target isn't reached?

Bear flags typically reach measured move targets within 1-3× the flag duration. If target not reached within this timeframe, consider pattern failed or significantly weakened. For example, daily chart flag lasting 7 candles should reach target within 7-21 candles (1-3 weeks). Beyond this period, either momentum exhausted, market conditions changed, or pattern failed. Exit at breakeven or small loss rather than holding indefinitely. Time stops prevent capital from being tied up in stagnant positions while new opportunities emerge.

Do bear flags work in all markets (stocks, forex, crypto)?

Bear flags work across all liquid markets but show varying success rates. Forex markets show highest reliability (approximately 78% success rate for high-quality flags) due to persistent trends and large institutional participation. Stock markets show good reliability (approximately 72% success rate) but require careful attention to overall market conditions—bear flags in individual stocks during market corrections show higher failure rates. Cryptocurrency shows lowest reliability (approximately 65% success rate) due to extreme volatility and manipulation risk but offers largest profit potential when successful. Adjust position sizing based on market reliability—standard size in forex, reduced size in crypto.

Key Takeaways

• Bear flags are bearish continuation patterns formed after sharp declines (flagpole) followed by consolidation (flag) between parallel trendlines; high-tight bear flags achieve 78% success rates while loose flags fail 60% of the time

• Use the 26-point quality checklist covering flagpole (trend context, strength, slope, volume, magnitude), flag consolidation (parallel boundaries, depth ratio, volume decrease, duration, containment), and breakdown (candle quality, volume expansion, follow-through); trade only 15+ point setups

• Three entry strategies: conservative breakdown entry (wait for candle close below lower boundary with volume confirmation), aggressive flag entry (at upper boundary before breakdown for better reward-risk), pullback entry (after confirmed breakdown when price retests broken boundary)

• Stop loss methods: structure-based (above flag high), ATR-based (1×ATR from entry), percentage-based (fixed % from entry); position size = account risk ÷ stop distance with maximum 0.5-1% account risk per trade

• Profit target strategies: measured move (100% of flagpole height from breakdown), partial profit taking (close 50% at 50% target, trail remainder), trailing stop (swing trail, fixed trail, or ATR trail)

• Volume requirements: flagpole 150%+ volume expansion, flag consolidation 50%+ volume decrease, breakdown 150%+ volume expansion; volume divergences indicate weak patterns

• Common mistakes to avoid: trading loose flags (depth >20% of flagpole), early short entry before breakdown confirmation, poor stop placement, ignoring higher timeframe trend, holding failed patterns after invalidation

• Market condition filters: trade when higher timeframe bearish, market not oversold, volatility moderate, no major news within 2 hours; skip when higher timeframe bullish/sideways, market oversold, major support below, news pending

ChartMini automatically identifies bear flag patterns across multiple timeframes, scores each pattern using a comprehensive quality checklist (flagpole strength, consolidation tightness, volume characteristics), alerts you only when high-probability 15+ point setups form, calculates optimal position sizes based on your stop distance, tracks your bear flag trading performance by pattern quality and timeframe, and provides real-time breakdown confirmation with volume analysis—helping traders short only high-quality bear flags with 75%+ success rates while automatically filtering out loose flags that fail 60% of the time.