News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.



Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Please try again
Oil - US Crude
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • The Nasdaq 100 index is aiming to breach a key resistance level at 14,950 for a second time. A successful attempt may open the door to further gains, although the MACD indicator flags signs of weakness. Get your equities forecast from @margaretyjy here:
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here:
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here:
  • Although the medium-term outlook remains negative, Bitcoin could make a bullish move in the coming days if prices manage to hold above key support in the $29,150/28,600 region. Get your #Bitcoin forecast from @DColmanFX here:
  • Risk management is one of the most important aspects of successful trading, but is often overlooked. What are some basic principles or risk management? Find out from @PaulRobinsonFX here:
  • Brush up your knowledge on trade-wars with this tool from DailyFX research briefly outlining trade-war history dating back to the early 1900s here:
  • Crude oil prices collapsed on Monday despite an OPEC+ breakthrough, driven by Covid-induced demand woes. Meanwhile, Gold is at odds with a stronger US Dollar and falling Treasury yields. Get your #crudeoil market update from @FxWestwater here:
  • AUD/USD is likely to face increased volatility over the coming days as it faces a batch of key event risks going into the end of July. Get your Australian Dollar forecast from @DavidJSong here:
  • The US Dollar outlook against ASEAN currencies like the Singapore Dollar, Thai Baht, Indonesian Rupiah and Philippine Peso remains bullish amid capital outflows risks as Covid cases swell. Get your market update from @ddubrovskyFX here:
Learn Forex: Trading the Forex Bear Flags to Short the Market

Learn Forex: Trading the Forex Bear Flags to Short the Market

Gregory McLeod, Currency Analyst
  • Forex bear flag patterns provide excellent setups to join a strong downtrend.
  • Flag patterns are easy to recognize and have good risk to reward setups with small stops and large limits.
  • The tighter the consolidation and more overlapping price action, the more reliable the pattern.

Today we continue our two-part series on flag patterns by discussing the bear flag pattern.

Learn Forex: Bull Flag Pattern

Trading_Bear_Flags_body_Picture_2.png, Learn Forex: Trading the Forex Bear Flags to Short the Market

(Created using FXCM’s Marketscope 2.0 charts)

As can be seen in the above illustration, the forex bear flag pattern starts with a strong nearly vertical downtrend made up of large range bearish candles arranged I a flagpole. Price action churns up and down in either a horizontal rectangular consolidation between a well-define areas of support and resistance.

On some occasions, the channel may be angled upward as buyers struggle to push price higher against the prevailing market tide. Try as they might, buyers are overwhelmed by selling pressure with price failing to breach resistance and returning back to support.

Savvy traders will recognize this pattern and look for a break below support to join a resumption of the downtrend.

Learn Forex: Bear Flag Pattern Setting Stops and Limits

Trading_Bear_Flags_body_Picture_1.png, Learn Forex: Trading the Forex Bear Flags to Short the Market

(Created using FXCM’s Marketscope 2.0 charts)

How to Trade

As depicted in the chart above, the forex bear flag pushes sharply below support catching would-be bulls off guard. Once the downtrend resumes, a stop can be placed about four pips above the top of resistance and a break 4 pips below support. Limits can be set to take profits at a 1:1 with the final position set at height of the flagpole.

To minimize fake breakouts, traders can wait for closed candles below support on an hourly time frame. In addition, traders can use their favorite oscillators like Stochastics or MACD to get additional confirmation through negative divergences. In negative divergence, price makes a higher high, but price makes a lower high. This signals traders that the countertrend up move has come to an end.

As stated by Thomas Bulkowski in his book Encyclopedia of Chart Patterns, tight formations that neatly stay within the rising or horizontal channel. Channels that slope down in the direction of the trend have a higher percentage of failure. In addition, the longer the channel, the less likely of a continuation breakout.

In sum, the forex bear flag pattern is easy to recognize with simple rules to observe to enter. Price targets and stops make the bear flag the ideal pattern for traders of all experience levels to benefit from. So when bulls wave the flag of surrender, look for the bears and the downtrend to resume!

---Written by Gregory McLeod, Trading Instructor

To contact Gregory McLeod, email Follow me on Twitter @gregmcleodtradr

I hope you found this article helpful and informative in seeing how to short the market effectively. To further your education on other methods to enter into a trade short using Fibonacci, sign my guest book and take a free 20 minute lesson that will show you.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.