Flags and Pennants are short-term continuation patterns

[tavi]

Sharp Move: To be considered a continuation pattern, there should be evidence of a prior trend. Flags and pennants require evidence of a sharp advance or decline on heavy volume. These moves usually occur on heavy volume and can contain gaps. This move usually represents the first leg of a significant advance or decline and the flag/pennant is merely a pause.

 

[fudgleb]

This is helpful. How to you know the reduced risk entry isnt just another retracement. Thank you