For an investor looking to profit, there is no better way than finding a bull flag formation in a stock chart. A bull flag can form after a stock, commodity, currency, crypto-currency makes a significant move higher. Investors should watch for a digestion period, where price goes sideways. When this happens, some investors are selling the pop while an equal amount are still accumulating. This is extremely bullish price action. It creates a near 90 degree (right) angle. A precise bull flag is a right angle but an in-spirit-of bull flag can have a slightly smaller angle as price pulls back.

An in-spirit-of bull flag is still a very bullish chart formation. In general, bull flag or in-spirit-of bull flag should have a 90 degree to 45 degree angle. Any number higher than 90 degrees or lower than 45 degrees would be invalid. The closer to 90 degrees the bull flag is, the higher percentage chance of success.

Investors and traders need to be patient on bull flag formations. There needs to be multiple candles sideways for the formation to mature and have the best chance of success. Generally, three to seven candles is the appropriate amount of consolidation. On the daily chart, this would equate to three to seven days of digestion/consolidation. Bull flags are one of the best setups for new and seasoned investors and traders. It can be combined with other factors to increase the odds of success even more.