Inverted Flag & Polepattern.
The bearish mirror of the Flag & Pole: a steep decline (the pole) followed by a short, shallow pause before the downtrend often resumes. The book notes it is seen less often than the bullish version.
- Bearish continuation after a sharp fall.
- Flag drifts sideways or slightly upward.
- Confirmation is a close below the lower boundary.
- Tighter pauses tend to resolve more decisively.
Idealised outline. The dashed yellow line is the support or resistance the book asks you to draw before naming the pattern.
How the book reads it
- 01
Structure — how to draw it
The pole is a near-vertical fall of wide bearish candles. The inverted flag is a tight consolidation between two parallel lines that are flat or slope mildly upward, resembling a small rising channel.
- 02
Psychology — who is in control
Short sellers book some profit and bargain hunters try to buy the dip, but rebounds stay weak and short-lived. Subdued volume during the pause suggests rest within weakness rather than genuine strength.
- 03
Confirmation
The book requires a decisive close below the flag’s lower boundary, ideally a strong bearish candle with expanding volume. A failed retest of the broken line from below supports the bearish continuation reading.
- 04
Risk — where the idea is wrong
A deep move back inside the flag invalidates the idea. As with the bullish version, the flag’s height frames both the stop distance and the first measured move, with the pole’s length as an extended reference.
- 05
Common trap
Mistaking a mild upward drift for recovery, or acting on an intraday dip below support without a close, are the errors the book highlights. The pause should stay brief and tight relative to the pole.
On real charts
Annotated by Mr. Chartist for the book: the structure, the breakout, the pattern's height and the level that proves the idea wrong. Historical charts for education — not a view on any stock today.
More horizontal patterns
Fixed decision zones where repeated reactions create price memory, balance, and eventual expansion.
From the book · Horizontal support & resistance
The full Inverted Flag & Pole chapter — in the book.
Development stages, volume behaviour, breakout quality, traps and more annotated case studies.
