Flags and pennants

A flag has two parts: first a sharp, almost vertical move — called the flagpole — then a narrow channel drifting gently against that move. In a rising market the flag hangs off the top of the pole like a small parallelogram. A pennant follows the same logic; the only difference is that the compression narrows into a small triangle instead of a channel.

Volume authenticates these patterns — level 4's lesson goes to work here. The typical picture: the pole forms on heavy volume, volume dries up noticeably through the compression, and it revives at the breakout. If volume does not dry up during the pause, what you see may be indecision rather than rest, and the pattern's "pause" story weakens.

Time is part of the identity too: flags and pennants are SHORT-lived structures — they rarely last many times longer than the pole took to form. If the compression stretches and widens for weeks, calling it a flag becomes forced. Pattern names are not a sticker collection; each name abbreviates a specific story of behaviour, and when the story fails, so does the name.