I've noticed that many traders overlook one of the most reliable patterns for short positions — the bearish flag. This pattern indicates a temporary pause before the continuation of a price decline, and if read correctly, it can help catch very strong downward trends.

What does this pattern look like? First, there is a sharp and steep drop with high volume — this is the poster. Then, the price bounces slightly, consolidates within a narrow range, forming a sort of flag. During this time, volume decreases because buyers lose strength. And when the lower boundary of the flag is broken — that's when sellers regain control, and volume spikes upward.

What's interesting is that the more intense the initial poster was, the stronger the breakout will be. This is the main principle to remember.

Now, about practice. When I spot such a pattern, I look for a strong downward trend followed by a narrow upward retracement. Then, I wait for the price to break the flag level with good volume — that's when I open a short position.

I place the stop-loss slightly above the upper boundary of the flag. And I determine the target price simply: I take the height of the poster and subtract it from the breakout price. For example, if the poster was 50 points high and the breakout occurred at 100, then the target price will be 50.

Why does this pattern work? Because it is one of the most reliable for short selling. The risk-reward setup is low risk and high reward. And importantly — this flag works everywhere: on stocks, crypto, forex, commodities. It’s perfect for both short-term traders and swing traders.

If you haven't traded this pattern yet, I recommend starting. Just remember — the bigger the poster, the stronger the decline will be.