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Detecting Flag and Pennant Continuation Patterns with Regression and Channels

Article MQL5 code base
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Summary

The indicator identifies flag and pennant formations, which are commonly interpreted as pauses after a strong price move before the earlier trend resumes. It uses linear regression to detect the trend and a channel to identify the intervening consolidation. The display distinguishes flags from pennants with separate line colors.

This is a brief description of a chart-pattern indicator, not a complete trading system. It does not explain the precise regression or channel rules, parameter settings, entry and exit criteria, or how patterns are confirmed. No historical tests or performance evidence are included, and the continuation interpretation can fail when a pause develops into a reversal or prolonged range. The indicator can therefore help visualize candidate formations, but the document does not establish that acting on them produces an edge.

Key ideas

  • The indicator searches for flags and pennants following a strong move.
  • Linear regression is used to identify the prevailing trend.
  • A channel is used to detect the pause or consolidation phase.
  • The described interpretation expects the primary trend to resume, but the source offers no validation or trading rules.

Tags

Technical indicatorsBreakoutTrend following

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.