Case Study: A Textbook Flag Pattern Winner on NZDJPY

In this article, we will be sharing our top-down analysis on a bullish flag pattern that brought us 60 pips on NZDJPY.


The flag pattern is a very common pattern that appears in the Forex market. When traded correctly, the reward far outweighs the risk. This setup we took in our Trading Floor is a prime example of that.

Typically, there are 3 main parts to a flag pattern. They are: the pole, the flag and the breakout

When identifying the pole, you want to look for strong impulses that are obvious to spot. In this example, the pole can be identified at (1). 

The next thing we want to look out for is the flag itself. The flag (2) is established in the form of consolidation within a channel. Price tends to bounce around in the channel before breaking out of the pattern.

After the sideways price action completes, a breakout is inevitable. In this trade, we bagged a cool 60 pips.

Now that we have correctly identified a potential flag pattern, it’s time to predetermine our stop loss and take profit level. For bullish flag patterns such as this one, conventional stops will have to go below the flag. However, some traders prefer conservative stops, having their stop loss below the previous low, at the expense of a lower risk/reward ratio. Risk management is subjective to each trader so you will have to place your stops wherever your risk/reward rules allow you.

We prefer to have a risk/reward of more than 3. This means we will be risking 1R to make 3R. In this setup, our stop loss was 15 pips below our entry and our target was 60 pips. This gave us a potential risk/reward of 4, which is of course more desirable than 3.

The entry for this trade was located at the bottom trendline of this channel. How did we know that price was going to bounce off this level and eventually break out? We didn’t. There was always a possibility that price would not respect the channel and break out towards the downside. There was also the possibility that price would continue bouncing around this channel before eventually stopping us out.

Now that we have determined our entry and stop loss, it’s time to establish our take profit level. Conventional targets are located at the top of the pole. However, we were looking for a potential bullish continuation. As such, we had a more aggressive target, which was above the top of the pole.

The reality of trading is that we have to take predetermined risks, and in this case, the risk we took paid off well. Price reacted well with our entry, before reversing towards the upside. You can see how price paused it’s bullish momentum near the top of the pole. This suggests that many other traders, who went long after the breakout, took profits off the table at that area. Price eventually resumed its bullish momentum and hit our target of 60 pips.

Flag patterns provide very reliable setups with the potential to reward you several times your risk. With a keen eye, you’ll realize  that flags appear all the time across all timeframes and anyone with patience can trade this simple pattern profitably.

Read More:

114 thoughts on “Case Study: A Textbook Flag Pattern Winner on NZDJPY”

  1. Hello ,

    I saw your tweet about animals and thought I will check your website. I like it!

    I love pets. I have two beautiful thai cats called Tammy(female) and Yommo(male). Yommo is 1 year older than Tommy. He acts like a bigger brother for her. 🙂
    I have even created an Instagram account for them ( ) and probably soon they will have more followers than me (kinda funny).

    I wanted to subscribe to your newsletter, but I couldn’t find it. Do you have it?

    Keep up the good work on your blog.


  2. Hello ,

    I saw your tweets and thought I will check your website. Have to say it looks very good!
    I’m also interested in this topic and have recently started my journey as young entrepreneur.

    I’m also looking for the ways on how to promote my website. I have tried AdSense and Facebok Ads, however it is getting very expensive. Was thinking about starting using analytics. Do you recommend it?
    Can you recommend something what works best for you?

    Would appreciate, if you can have a quick look at my website and give me an advice what I should improve:
    (Recently I have added a new page about FutureNet and the way how users can make money on this social networking portal.)

    I wanted to subscribe to your newsletter, but I couldn’t find it. Do you have it?

    Hope to hear from you soon.

    Maybe I will add link to your website on my website and you will add link to my website on your website? It will improve SEO of our websites, right? What do you think?

    Jan Zac

  3. This design is wicked! You certainly know how to keep a reader entertained. Between your wit and your videos, I was almost moved to start my own blog (well, almost…HaHa!) Fantastic job. I really loved what you had to say, and more than that, how you presented it. Too cool!

  4. I’ve been browsing online greater than 3 hours lately, yet I never found any attention-grabbing article like yours. It’s beautiful value enough for me. In my opinion, if all site owners and bloggers made good content material as you probably did, the web can be a lot more useful than ever before. “We are not retreating – we are advancing in another Direction.” by Douglas MacArthur.

  5. Pingback: Google

  6. Pingback: Google

  7. Pingback: Sex dating

  8. Pingback: NSFWTOPHOOKUP

  9. Thanks for this great information. Well I wants to know little more about how we can convert any amazon link into affiliate link. Like we have tool for flipkart link but I am unable to find any tool for Amazon. Can you suggest me anyone?

  10. Did you know that my lists can be used with GSA? They can. I’m always working hard to improve
    the quality of my lists. Check them out and
    see if you can put them to good use. Thanks for visiting my site and have a great day.

  11. Good art! Option types of information that are supposed to become embraced around the internet. Feel bad for on the internet for no lengthier placement this kind of placed bigger! Come on around and also talk to this site. Thank you Equates to)

  12. Here is where I put all of my expired web 2.0 accounts. I scrape massive lists and then check
    to see if they’re expired. I think you’ll be surprised by the number of accounts that
    I come across. Hopefully, you’ll be able to put these expired accounts to
    good use.

  13. I’m really enjoying the design and layout of your website.
    It’s a very easy on the eyes which makes it much more pleasant for me to come here and visit more often. Did you hire out a designer to create your theme?
    Superb work!

  14. After going over a number of the articles on your web page,
    I truly like your way of writing a blog.
    I bookmarked it to my bookmark website list and will be checking back soon. Please visit my website too and tell me how you feel.

  15. Greetings from Los angeles! I’m bored to tears at work so I decided to check out your site on my iphone during lunch break.
    I love the information you provide here and can’t wait to take a look when I get home.
    I’m amazed at how quick your blog loaded on my mobile ..
    I’m not even using WIFI, just 3G .. Anyways, fantastic site!

  16. Thanks for some other informative blog.
    The place else could I get that type of info written in such a perfect manner?
    I have a project that I am simply now running on, and I’ve
    been on the glance out for such information.

  17. This is the part of my site where I list all of the expired domains from
    sites that I scrape. I scrape the most popular sites on the
    internet to produce lists of expired domains.
    All the lists are free, and I try to update them as often as possible.

  18. Hi there! This blog post couldn’t be written any
    better! Looking through this post reminds me of my previous roommate!
    He continually kept preaching about this. I am going to send this post to him.

    Fairly certain he’ll have a very good read.
    Thanks for sharing!

  19. I’m really impressed with your writing skills and also with the layout on your blog. Is this a paid theme or did you modify it yourself? Either way keep up the excellent quality writing, it is rare to see a great blog like this one today..

  20. Greetings! Quick question that’s entirely off topic.
    Do you know how to make your site mobile friendly? My website looks
    weird when browsing from my iphone. I’m trying to
    find a template or plugin that might be able to resolve this
    issue. If you have any suggestions, please share.
    With thanks!

  21. I seriously love your blog.. Pleasant colors & theme. Did you create this amazing site yourself?
    Please reply back as I’m trying to create my own personal website and would like to
    find out where you got this from or exactly what the theme is named.
    Thank you!

  22. Every 60 minutes there are new public proxies added.
    You can directly import these into your SEO tools or do it manually.
    There are proxies for ScrapeBox and all other tools. Let me know if you
    need free public proxies for other tools. I’ll try to add them if
    I can.

  23. Please let me know if you’re looking for a author for your site. You have some really great articles and I feel I would be a good asset. If you ever want to take some of the load off, I’d love to write some content for your blog in exchange for a link back to mine. Please blast me an e-mail if interested. Thanks!|

  24. I’m no longer positive where you are getting your info, but good topic.
    I must spend some time learnkng more or figuring out more.
    Thank you for excellent information I was on the lookout for this information for
    mmy mission.

  25. What i do not realize iis if truth be told how you’re now not really much more neatly-liked than you may be now.
    You are very intelligent. You understand thus significantly inn relation to this subject, produced me individuaqlly
    consider it from numerous varied angles. Its like men and
    women aren’t involved except it’s one thing to do with Woman gaga!
    Your individual stuffs excellent. Always deal with it up!

  26. Wonderful beat ! I wish to apprentice while you amend your web site, how could i subscribe for a blog website?
    The account aided me a applicable deal. I were tiny bit acquainted
    oof this your broadcast offered bright transparent idea

  27. I’m amazed, I must say. Rarely do I come across a blog that’s both eeducative annd amusing, and let
    me tell you, you’ve hit thee nail on the head. The prolem is something not enough folks are speaking intelligently about.
    I am very happy that I stumbled across this iin mmy search for something concerning this.

  28. Wonderful beat ! I woulpd like to apprentice while you amend your webb site,
    how can i subscribe for a blog site? Thee account aided me a acceptable deal.

    I had been tiny bit acquainted of this your bdoadcast provided bright clear idea

  29. It’s perfect time to make some plans for
    the long run and it’s tme to be happy. I’ve read thgis publush and if I could I desire to
    recommend you few interesting issues or advice. Maybe yyou could write subsequent artiles referring too
    thjis article. I wish to learn more issues aout it!

  30. Great blog you have here but I was wanting tto know if you
    knew of any community forums that cover the ame topics talked about in this article?
    I’d really like to be a prt of group where I can get responses from other knowledgeable
    individuals that share the same interest.

    If you have anny suggestions, please let me know.


  31. Today, I went to the beach with my kids. I found a sea shell and gave
    it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.”
    She placed the shell to her ear and screamed. There was
    a hermit crab inside and it pinched her ear. She never wants
    to go back! LoL I know this is completely off
    topic but I had to tell someone!

  32. I was suggested this website via my cousin. I am now not sure whether or not this publish is written by means of him as nobody else know such distinctive about my difficulty. You are amazing! Thanks!

  33. Thank you a lot for providing individuals with remarkably nice opportunity to check tips from this site. It is usually very superb and packed with a good time for me and my office mates to search your site on the least three times weekly to find out the fresh tips you have got. Of course, I am just actually pleased concerning the unique secrets you serve. Some two tips in this post are certainly the best I’ve ever had.

  34. I really wanted to compose a simple message in order to say thanks to you for the nice tips you are placing on this website. My prolonged internet lookup has at the end of the day been honored with brilliant facts to go over with my friends and classmates. I would believe that many of us readers are very much endowed to live in a great community with very many perfect individuals with good secrets. I feel very lucky to have come across your entire weblog and look forward to some more fabulous times reading here. Thanks a lot again for a lot of things.

  35. I’ll immediately take hold of your rss feed as I can not
    inn finding your email subscription link or e-newsletter service.
    Do you have any? Please let me recognize in order that I could subscribe.

  36. I have to show thanks to the writer just for bailing me out of this particular problem. Right after checking through the world wide web and getting ways which were not helpful, I assumed my entire life was gone. Living without the approaches to the problems you have sorted out all through this post is a critical case, and those that could have in a negative way affected my career if I had not discovered your site. The knowledge and kindness in touching a lot of things was helpful. I am not sure what I would’ve done if I hadn’t come across such a subject like this. I’m able to at this time look ahead to my future. Thanks for your time very much for the high quality and effective help. I won’t be reluctant to suggest your web site to any individual who needs tips on this problem.

  37. Woah! I’m really enjoying the template/theme of this blog.
    It’s simple, yyet effective. A lot of times it’s tough to get that “perfect balance” between user friendliness and visual
    appearance. I must say you have done a superb job with this.
    Additionally, tthe blog load very fast for me
    on Chrome. Outstanding Blog!

  38. Thanks for your marvelous posting!I truly enjoyed reading it, you will bee a great
    author.I will remember to bookmark your blog and will eventually come back
    down thee road. I want to encourage you to ultimately continue your great writing, havce a nice weekend!

  39. I don’t even know the way I finished up here, however I believed this publish
    was once good. I do not recognize who you are however certainly you are going to a famous blogger should you aren’t already.

  40. I am really impressed with your writing skills and
    also with the layout on your blog. Is this a paid theme or did you customize it yourself?
    Either way keep up the excellent quality writing, it is rare to see a great blog like this one these days.

  41. Thank you for all your valuable efforts on this website. My aunt takes pleasure in engaging in internet research and it is obvious why. A lot of people notice all about the dynamic means you convey invaluable guidelines on the web site and even improve contribution from website visitors about this situation while our favorite daughter is now studying a lot. Have fun with the remaining portion of the year. You’re the one performing a remarkable job.

  42. This iss really interesting, You’re a very professional blogger.
    I’ve joined your feed and stay up for in quest of extra of yyour wonderful post.
    Additionally, I have shared your site in my social networks

  43. I like the valuable info you provide in your articles.

    I will bookmark your weblog and check again here regularly.
    I am quite certain I wil learn many new stuff right here!
    Good luck for the next!

  44. Admiring the dedication you put into your site and in depth information you offer. It’s good to come across a blog every once in a while that isn’t the same unwanted rehashed material. Fantastic read! I’ve saved your site and I’m including your RSS feeds to my Google account.

  45. I get pleasure from, cause I found just what I used to be
    looking for. You’ve ended my four day long hunt!
    God Bless you man. Have a grerat day. Bye

  46. Hello! I’m aat work browsing your blog from my new iphone 3gs!

    Juust wanted to say I love reading through yor blog and look forward to all your posts!
    Carry on the fantastic work!

  47. Appreciating the hard work you put into your site and detailed information you present. It’s great to come across a blog every once in a while that isn’t the same old rehashed material. Excellent read! I’ve bookmarked your site and I’m adding your RSS feeds to my Google account.

  48. Great beat ! I wish to apprentice while you amend your site, how could i subscribe for a blog website? The account aided me a acceptable deal. I had been a little bit acquainted of this your broadcast offered bright clear idea|

  49. I do not even know howw I ended up here, but I thpught this
    post was great. I do not know who you are but definitely
    you’re going to a famous blogger if you are not already 😉 Cheers!

  50. Howdy would you mind letting me know which hosting company you’re utilizing? I’ve loaded your blog in 3 different browsers and I must say this blog loads a lot quicker then most. Can you suggest a good web hosting provider at a fair price? Thanks, I appreciate it!

  51. Definitely consider that that you said. Your favorite reason appeared to be at the web the simplest thing to take into accout of. I say to you, I definitely get annoyed at the same time as other people consider worries that they just do not recognize about. You managed to hit the nail upon the top and outlined out the whole thing with no need side-effects , people could take a signal. Will likely be again to get more. Thank you|

  52. Nice blog over again! I am looking ahead for even more updates, I was checking frequently this blog and I’m satisfied! Extremely helpful details specifically the tail end I care for such details a lot.
    I was seeking this particular info for a long time. Thank you and best of luck.

  53. hello there! , I enjoy the crafting so so much! ratio most people keep in contact additional roughly the document for Yahoo? I need a specialist about this home to resolve my own problem.. modal saham Could be that is an individual! Having a look to view you.

  54. Woah! I’m really enjoying the template/theme off this website.
    It’s simple, yet effective. A lot of times it’s diffticult to get that “perfect balance” bewtween usability annd visual appeal.
    I muust saay you’ve done a fantastic job with this.
    Also, the blog loads extremely fast for me on Internet explorer.
    Excellent Blog!

  55. Have you ever thought about including a little bit more than just your articles? I mean, what you say is valuable and all. Nevertheless think of if you added some great images or video clips to give your posts more, “pop”! Your content is excellent but with images and videos, this site could undeniably be one of the best in its field. Great blog!|

  56. What i do not realize is in fact how you’re not really a lot more well-favored than you might be now.
    You’re so intelligent. Yoou recognize thjerefore significantly in relation to this subject, produced me in my view believe
    it from numerrous numerous angles. Its like men and women aren’t interested nless
    it’s something to ddo with Lady gaga! Youur individual sfuffs excellent.

    Always deal with it up!

  57. I was curious if you ever thought of changing the structure of
    your website? Its very well written; I love what
    youve got to say. But maybe you couuld a little more in tthe way of content soo people could connect with iit better.
    Youve got an awful lot of text for only having 1 or 2 images.

    Maybe you could space iit out better?

Leave a Comment

Your email address will not be published. Required fields are marked *