Final Flags: Video 23 A & B

Question 1

When you see a chart with several flags and breakouts. One flag is the final flag. Then the trend reverses. A flag is a pullback, so that means the trend usually continues instead of reverses. After the trend reverses, you can look back and find the Final Flag in the trend. However sometimes you get a flag at the end of a trend that leads to a reversal.

Answer 1

Question 2

The purpose of discussing Final Flags is, the Final Flag in a trend often have some characteristics that lead traders to suspect that the breakout might fail and lead to a reversal. So it’s important to be able to identify when a flag might be the last one in a trend because: 1. You’ll take quick profits, 2. You’ll be starting to look for a reversal trade.

Answer 2

Question 3

Sometimes the first reversal attempt of a trend fails, then you get a resumption of the trend, then a second attempt. Whenever you have an attempt at a top in a bull trend and the attempt fails, always be prepared for another reversal attempt.

Answer 3

Question 4

Whenever you see a breakout in a trend, you have to wonder whether it will lead to a measured move. it’s important to make a projection up, then see how the market reacts when it reaches that projection.

Answer 4

Question 5

An “ii” pattern late in a trend often leads to a reversal, (and in this picture it was the apex of a wedge at a measured move target, which makes it a good sell candidate)

Answer 5

Question 6

A Final Bull Flag is more likely if:

Answer 6

Series of Buy Climaxes (with very little pullback)
Sideways Trading Range (after 10-20 bars or so, traders stop calling a pullback, and call it a trading range). A pullback that grow into a TR late in a bull trend increases the chances of a reversal.

Just below resistance, like a Measured Move, or top of channel

Question 7

Often a sideways Trading Range at Bull Trend climax means bull sand bears are in agreement, bears as strong as bulls. Therefore assume price will come back to the trading range. Trading Ranges have magnetic pull.

Answer 7

Question 8

A Final Bear Flag is more likely if:

Answer 8

Just above support, Like Measured Move or Bottom of channel

Series of Sell Climaxes

Late in a Trend (20 or more bars) without much of a pullback

Sideways trading Range

Question 9

True or False: final Flag can be as small as one bar

Answer 9

True

Question 10

A tight trading range after a Bull Trend if often the final Bull Flag and the breakout leads to a reversal down.

Answer 10

Question 11

After consecutive Sell Climaxes, there’s no Bulls left to sell out of longs. Smart bears no longer willing to sell at this level. What do you look for?

Answer 11

Swing up to find a price where bears will sell.