flag-pennant

name	flag-pennant
description	Define and test flag or pennant continuation shapes. Use when measuring an impulse, consolidation, closed-bar break, invalidation, and measured-move hypothesis.
license	Apache-2.0
metadata	{"author":"ske-labs","version":"4.0"}

Flag & Pennant Patterns

Continuation patterns that form during pauses in strong trends.

Pattern Structure

Components: Flagpole (strong impulsive move) → Flag/Pennant (consolidation) → Breakout (continuation).

• Bull Flag — Strong upward pole, downward-sloping rectangular channel, breaks upward
• Bear Flag — Strong downward pole, upward-sloping rectangular channel, breaks downward
• Pennant — Strong move (pole), symmetrical triangle consolidation, breaks in pole direction

Criteria	Flag	Pennant
Shape	Rectangular channel (2 parallel lines)	Symmetrical triangle (2 converging lines)
Slope	Against trend	Neutral
Volume	Decreasing	Decreasing

Workflow

1. Get Swing Point Data

Identify the flagpole and consolidation boundaries:

get_candles_around_date(symbol=<symbol>, exchange=<exchange>, interval=<interval>, date=<flag_date>)

2. Draw Flag/Pennant Boundaries (2 parallel calls)

For flags (2 parallel trend lines sloping against the pole):

# Upper flag boundary
draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": <flag_high1_time>, "price": <flag_high1_price>},
        {"time": <flag_high2_time>, "price": <flag_high2_price>}
    ],
    "options": {"text": "Flag R"}
})

# Lower flag boundary (parallel to upper)
draw_chart_analysis(action="create", drawing={
    "type": "trend",
    "points": [
        {"time": <flag_low1_time>, "price": <flag_low1_price>},
        {"time": <flag_low2_time>, "price": <flag_low2_price>}
    ],
    "options": {"text": "Flag S"}
})

For pennants: same approach but lines converge (like a small symmetrical triangle).

3. Confirm and Enter

Confirm declining volume during consolidation via get_indicators(indicator_code="mfi", symbol=<symbol>, exchange=<exchange>, interval=<interval>).

Standard: Enter on break of flag/pennant boundary with volume spike. Stop beyond opposite side. Conservative: Wait for breakout + retest of boundary. Enter on bounce. Target: Flagpole length projected from breakout point.

Evidence and Validation

• Treat the setup as a testable hypothesis, not a prediction. Define thresholds, entry, invalidation, and exit before evaluating outcomes.
• Calibrate on the same instrument, venue, session, and timeframe. Use closed candles and a held-out or walk-forward sample; record every variant tried.
• Include spread, fees, slippage, borrow or funding, partial fills, and latency. Reject the setup when net expectancy is not positive or depends on one narrow parameter.
• Return observed inputs, missing data, cost assumptions, entry, invalidation, exit, and a valid, watch, or no-trade status.
• Research basis: Lo, Mamaysky & Wang supports objective pattern definitions and conditional testing rather than visual labels alone.

Key Rules

• Quantify the pole with return divided by ATR and a maximum bar count; “looks impulsive” is not reproducible
• Define and calibrate the maximum retracement rather than assuming 50% is universal
• Treat volume contraction and breakout expansion as candidate filters; report their measured values
• Quick formations are more reliable than extended consolidations
• Flag duration should be short relative to the pole

Related Skills

• triangle-patterns — Pennants are small symmetrical triangles
• channel-trading — Flags are short-duration trending channels