Whenever we talk about Forex flags, it should click in the mind of many traders about the wedges and triangles that we are discussing.

Actually, there is not big difference between flags and wedges – they are the short-term trading continuation patterns.

This Forex flag is a technical chart pattern with sharp rising and falling trends including many bars of price movements of weaker trade followed by a next high and low moves of the trade.

The flags are the result of the price fluctuations in a particular range and point out the consolidation before the last move recommences.

These chart patterns represent the continuation chart patterns that mean there are less trend reversals. The Forex flag looks like a parallelogram or rectangle indicated by two parallel trend lines that inclined against the existing trend.

They represent only short gaps in the currency pair’s trend, and are mostly observed after a big and rapid price action. The currency value then generally moves for a second time in the same direction.

The outcome of research has revealed that these patterns are a few of the most consistent and reliable continuation chart patterns.

The flags have a characteristic feature of thinning trade volume and different measuring insinuations. It has similarity with the pennant, which is also a continuation chart pattern.

The price then usually takes off again in the same direction. Research has shown that these patterns are some of the most reliable continuation patterns.

These flags help Forex traders to examine the recent changes in the trends and predict the next course of action, in order to make further positions in the market.