A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. The blue line is the target. The orange line is the invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$49 · at the close of session 38
Target
61$
Invalidation
47$
Pattern height
12$
Chart span
64 sessions
What it is
A sharp jump (the flagpole) followed by a narrow slope against the trend (the flag). Orderly profit-taking, not a reversal: the seller sells in a tidy channel while the buyer absorbs.
When the trigger starts and when it fails
Signal
A close above the flag's upper boundary on high volume.
PoleA near-vertical jump on heavy volume · the original thrust.
FlagA narrow decline sloping down with volume drying up. This is a requirement, not decoration: without the dry-up it is distribution, not a pause.
BreakoutPrice moves past the flag's upper boundary on high volume · the target is the pole's length added to the breakout point.
Recognition rules
A near-vertical pole on heavy volume before the flag.
The flag is a narrow channel sloping down at a gentle angle.
Volume dries up inside the flag · this is a requirement, not decoration.
The pullback usually doesn't exceed 38% of the pole · going past 50% weakens the pattern.
A breakout above the flag's upper boundary on high volume.
Measuring the target
The pole's length is added to the breakout point: a pole from $40 to $52 ($12) and a breakout at $49 ⇒ a target of $61.
Where it fools you
If volume doesn't dry up inside the flag, it isn't a flag but the start of distribution. And a flag sloping up (not down) is a rising wedge · a pattern with the opposite meaning.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
╱ TrendlineFlag
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
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