Bull and bear flags: a 6-point checklist before you enter

Flags are among the first patterns beginners learn and among the most over-drawn. Almost any pause after a move can be called a flag if you squint. A checklist forces you to say what has to be true before the drawing counts.

What a flag is

A bull flag is a sharp move up (the pole) followed by a short, shallow drift down or sideways (the flag). A bear flag is the mirror image. The pattern describes a market that paused without giving back much of the move. It does not promise that the move resumes.

The 6-point checklist

#	Check	Why it matters
1	The pole is clearly steeper than the flag	Without a strong pole there is nothing to continue
2	The flag retraces less than half of the pole	Deep pullbacks are corrections, not pauses
3	The flag lasts fewer candles than the pole, roughly	Long consolidations become ranges
4	The higher timeframe points the same way	A bull flag under daily resistance is fighting the bigger chart
5	The trigger is a close beyond the flag's boundary	Wicks through the line get no credit
6	Stop and target are written before entry	Otherwise the pattern decides nothing

If any line is a "maybe", the answer is no trade. That is the point of writing it down.

Stops and targets

The usual stop sits beyond the far side of the flag: under the lowest point of a bull flag. Some traders project the pole's length from the breakout as a target; treat that as a teaching convention, not a forecast, and compare it with the next level on the chart. Check the reward against the risk in the risk-reward calculator.

Worked example

GBPUSD, M15. Pole from 1.2700 to 1.2760 (60 pips). The flag drifts down to 1.2738, a 22-pip pullback, about 37% of the pole. A candle closes at 1.2752, above the flag's upper line.

Item	Value
Entry	1.2753
Stop	1.2734 (19 pips, under the flag low)
Target	1.2791 (38 pips, 2R)
Risk	$40, so 40 ÷ (19 × $10) = 0.21 lot

Illustrative calculation, not an expectation of results.

Run the size through the lot size calculator; the $10 per standard lot figure applies to USD-quoted pairs only.

Common mistakes

• Calling a flag after the breakout already ran. Draw it before, or don't trade it.
• Ignoring the session. A flag that forms in the quiet hours often just keeps drifting. The market sessions tool shows when London and New York overlap in Brasília time.
• Confusing a flag with a range. If price keeps bouncing between two flat lines, read the rectangle pattern guide instead.

Make it yours

Turn this checklist into a setup card with the fill-in template and count how often each point disqualifies a trade. Most retail traders lose money, and the checklist is there to make you say no more often, not to make winners appear.