Bull flag
A bull flag is a chart pattern made of a sharp move up on heavy volume, called the pole, followed by a short, orderly pullback or sideways drift on lighter volume, called the flag. Traders read it as a pause in an uptrend and look to buy when price breaks back above the top of the flag.
Why it matters to a small-cap momentum trader
On small-cap momentum stocks, bull flags form on the one-minute and five-minute charts all morning, and they offer a defined entry and stop. A healthy flag pulls back only a small part of the pole, holds above VWAP or the 9 EMA, and is quiet on volume; the breakout candle should bring the volume back. A pullback that gives up most of the pole, or breaks down on heavy selling, is no longer a flag.
How it is traded
Entry. The first candle to make a new high above the flag.
Stop. Below the low of the flag.
Target. Often a retest of the high of the pole, or a move equal to the length of the pole.
A pattern is a probability, not a rule. Flags fail often enough that the stop matters more than the entry.
Bull flags in Hindsight Markets
Replay a morning and the flags form bar by bar, without the hindsight of a finished chart. Draw the flag, drag your entry and stop onto the chart, and the journal measures how far each trade went for you and against you.
Practice this on a real past day in Hindsight Markets
Replay a real morning at your own speed, take every flag you see, and let the journal show which ones paid.