Pattern/Setup ONE:
First things first:
I ALWAYS put trades based on where and what i think the Indices are are going to trade. If i think the indices are poised to move higher, then i want to position in the best and strongest stocks in the most powerful patterns. and vice versa.
So, Here is the type of flag patterns i like to look for and i consider these high probability patterns and I get excited whenever i spot them. These type of patterns are very common in momentum markets and i usually buy the pattern first and ask questions later.
1. Flags, Flags, Flags: I try to spot flags on ALL time frames. The daily charts are usually the most compelling to me. Always look for strong volume that propells the stock higher for at least 2-3 strong green bars bars, then a narrowing declining or sideways moving bars on declining volume. I like to position in the flag pattern rather than wait for a breakout. Breakouts usually happen fast and are very violent as flags are merely a 'pit stop' and there's a lot of eager traders waiting to jump in.
The Charts above are some examples of Flags I look for: Hope it will help you too.
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