Trend / Momentum
Flag / Pennant Continuation
A flag or pennant is a brief sideways pause after a sharp move, the pole, and the trade is betting the breakout out of that pause continues about as far as the pole itself.
Fit the channel, then test the breakout
The sharp move on the left is the pole. Drag the two gold circle handles on the right side of the chart, one on the upper trendline and one on the lower, to fit a channel around the sideways consolidation that follows it. When the channel looks right, click test the breakout. Where price actually crosses your line sets the breakout price, and the measured move target is the pole's height added from there.
Drag the gold circles up or down · left anchor points are fixed at the start of the consolidation
How it works
- The pole sets the unit of measurement. Its height, the price distance from where the sharp move started to where the consolidation began, is the same distance projected forward once the channel breaks.
- The channel you draw decides where the breakout is measured from. A tight channel triggers a breakout close to the consolidation, at a lower starting price for an upside setup. A wide, loose channel lets price wander further before it counts as a break, which shifts the breakout price and the target with it.
- Target equals breakout price plus pole height, in the pole's direction. For an upside pole that means the target sits above the breakout price by exactly the pole's height in points. For a downside pole it sits below by the same distance.
- The test tells you if price got there. After the break, the tool tracks the furthest price reaches in the breakout direction and compares that extreme to the target: short of it, at it, or well past it.
Where this breaks
Failed breakouts and measured-move targets that never get hit
The measured move is a rule of thumb built from one data point, the pole's own height, applied to a different, later move. Nothing forces the second move to match the first. Run the tool a dozen times with a reasonable channel fit and a meaningful share of the runs come back fell short, sometimes by a wide margin, even when the breakout direction was correct. A channel drawn too tight makes the problem worse in a different way: price can tag your line on ordinary noise inside the consolidation, well before a real breakout, and trigger a target measured from a breakout price that was never a genuine break at all. The pattern gives you a direction and a rough distance to watch for, not a number the market is obligated to reach.