The Flag is a continuation chart pattern that indicates a buy or sell signal after the pattern has been broken.
The pattern consists of:
A Support Line and a Resistance Line, where price will stay between for a period of time. Forming a rectangular area that resambles a Flag.
After the price breaks out of this pattern either a buy or sell signal is given.
After the breakout of the pattern, the price wil usually continue in the original trend as before the pattern started.
When price moves up and outward and closes outside the pattern of the Flag, you are given a Buy Signal.
When price moves down and outward and closes outside of the pattern of the Flag, you are given a Sell Signal.