I've noticed that many traders, especially those who catch short-term trends, constantly talk about the bear flag. And honestly, it's one of the most reliable patterns for short selling if you know how to read it.

Here's the essence. First, you see a sharp price drop with good volume—that's the so-called poster. Then the price slightly retraces upward or sideways, as if pausing for a moment. This is the flag. The key point is that the volume during the retracement noticeably decreases, indicating weakening buyers.

When a bear flag forms and you see the volume start to increase again, that's a signal. The price breaks below the lower boundary of the flag, and the trend continues downward. This is the entry point for a short position.

Practically speaking, when I catch such a pattern, I wait for a clear breakout with increasing volume. I place my stop-loss above the upper boundary of the flag—that gives me a clear exit point if something goes wrong. I calculate the target profit simply: take the height of the poster and subtract it from the breakout price. If the poster was 50 points and the breakout occurred at 100, then the target price is 50.

What makes the bear flag so powerful? It works everywhere—on stocks, crypto, forex, commodities. The risk-reward ratio is usually good, and the pattern is clear enough to notice. The main rule is that the more intense the poster, the stronger the breakout will be. This is not just words; it's an observation from real trading.

For swing traders and short-term traders, the bear flag is a real find. It only requires patience and discipline when entering. Wait for confirmation, don't enter too early.