TRENDING

What Is Dark Pool Trading?

Millionaire trader, Taylor Conway, simplifies Dark Pool trading with his one-of-a-kind scanner that cuts down lag time in locating quality, high-yielding trades.

Almost half of all the trades in the stock market are executed in the dark pools. See how it can pay off for you!

The One Thing Small Caps Can Teach Us About IPOs

Jason BondJason Bond ·

Trading the bull flag pattern is pretty simple and straightforward. The availability of scanners makes it fairly easy to pinpoint upward trending stocks, so all you have to do in most cases is wait for them to consolidate at the top position.

Bull Flag Pattern Indicators

There are a few indicators to keep an eye on when on the lookout for bull flag patterns:

  • Stocks that increase at high relative volumes mostly spurred on by news events
  • Stock prices that remain at highs or near high

In general, it is best to move when prices break out on high volumes or above consolidation patterns. You should also place stop orders at the point just below the consolidation pattern’s bottom.

The optimum risk-reward ratio for profit should be about 2:1. If you initially risk $0.25, your first PT should be $0.50.

Volume Is the Biggest Indicator

The most important indicator of a bull flag pattern is volume. In most cases, this indicates impending major moves and suggests a strong possibility of a successful breakout.

Also, look out for defined descending trends. These trends usually indicate the next point of breakout, which is represented as the topmost segment of the flag in the bull flag pattern.

Know Your Exit Strategies

Bull flags can be quite effective tools for trading if they are used correctly. Nevertheless, it is important to have an exit strategy if you realize that your trading route isn’t viable and you have to consider other options.

There are two possible options in such scenarios. One is to place a stop order just below the consolidation area. This is a fairly common strategy when traders decide to accept their losses and to move on to other options.

Alternatively, you may opt to use the 20-day moving average as a stop. If you go for this course, it will be necessary to close out your position if the stock’s price closes below the moving average.

Use a Different Approach

When small-cap momentum stocks have faster gains than other small-cap stocks, this is a strong indication of a profitable trading opportunity. Also, keep in mind that as mentioned before, the news greatly impacts small cap stocks and initial public offering stocks, also known as IPOs. It’s important to stay up to date on the latest news as a way to benefit from trends and similar events.

Trending Now

Bull or Bear Market….It Doesn’t Matter

Kyle Dennis’ new, 5 min strategy is poised to double account sizes weekly! “I got out of GE trade at 379% $0.16-$0.77, thanks Kyle!” Said client Lance P. Check out the free training that started it all. (View Free Training)

SuperNova Service Leading Clients to 5-Figure Profits Consistently

“BOOM!!! Booked another $13,985 in profits on my long position $VMNGF. Great report came out premarket. Thanks Jeff at SuperNova for teaching me to make $$$ in the market.” Said Todd V. Jeff Williams is helping transform small accounts daily. Don’t miss his free walkthrough. (Watch Now)

Jeff Bishop, RagingBull.com Co-Founder, “Trading My Strategy Takes A Few Minutes a Day!” 

“Jeff, I have to say I was a little gun shy, but I bought the lifetime service (to Bullseye Trades) Friday night. First trade with your service…in LULU, 205 Calls at $4.70. (I) was going to be away from all internet connections for the next 3 days. It hit my sell price at $6.25 ;)” said James W.    (Read More)

Be a Better Stock Trader, Starting Today

Get the expert insights, tips and strategies you need to optimize your trading skills and profiles
START NOW