6-10-2014 Flag trade setup on bitcoin, buy on breakout

Hello Bitcoiners:

This post will be a a trade setup rather than an educational article. I try to switch it up a little. I went over how to trade a bull flag in the last article. If you are unfamiliar, you can learn about bull flags there.

We have a trade setup on the daily bitcoin chart. Take a look at the chart below.

Bitcoin flag setup:

Type: Flag.

Confirmation: Breakout above 680 to confirm.

Bitcoin bull flag trading pattern; Recognition and buy setup

Today, I will be covering a continuation trading pattern called a flag. Flag can be bullish and bearish. I will cover only bullish patterns, it works just as well for bear flags as well. Concept explained and history of this pattern will be covered at the end.

What is a flag?

The pattern is exactly how it sounds; it looks like a flag waving. The pole part of the flag is the fast price rise and the flag itself is the consolidation period. (Look at my chart for reference). A bull flag is a continuation pattern where the price stalls and consolidates briefly before continuing to rise further.