Channels, ranges and flags
You will learn to
- Parallel boundaries
- Flags and pennants as pauses
- What was and was not tested
Channels and ranges
Parallel lines through the swing highs and lows: rising, falling or flat (a range). Inside, traders fade the edges; the signal tested here is a close outside the channel.
Flags and pennants
A flag is a short pause after a sharp move (the pole): a small drift against it that keeps most of the move. A pennant is the same with a tiny triangle. Their measured move projects the pole's length from the breakout.
What our backtest found
4H, unseen 2024–26: falling channel +0.69R (26 trades), rising channel −0.08R (28). Flags are shown while forming only; they have no tested breakout rule here yet.Advertisement
Check yourself
1. What is the "pole" of a flag?
- The breakout candle
- The sharp move before the pause ✓
- The stop-loss
A flag is a pause after a strong move; the pole is that move.
Terms in this lesson
- Channel
- Parallel boundaries through swing highs and lows.
- Flag / pennant
- A short pause after a sharp move (the pole).
Practise it on real charts. In the app, this lesson comes with real examples (reveal what happened next), a graded drill and the track test. Open the Academy in NexusCore — free →