The Flag and Pennants MT4 indicator scans and displays flag and pennant chart patterns on the Metatrader 4 trading platform.
Flags and pennants are typically trend continuation chart patterns.
This is an excellent indicator for price action traders. A 100% no lag forex indicator!
How to trade
In an uptrend, open a buy order when the price bar breaks and closes above the resistance line of the flag or pennant chart pattern.
Place a protective stop-loss below the chart pattern.
In a downtrend, open a sell order when the price bar breaks and closes below the support line of the flag or pennant chart pattern.
Place a protective stop-loss above the chart pattern.
Free Download
Download the “flag-and-pennant-patterns.mq4” MT4 indicator
Indicator Chart (GBP/USD H4)
The GBP/USD 4-Hour chart below displays the Flag and Pennants Metatrader 4 Forex indicator in action.
Basic Trading Signals
Signals from the Flag and Pennants MT4 forex indicator are easy to interpret and go as follows:
Buy Signal: Initiate buy order when the candlestick breaks and closes above the Flag and Pennants chart pattern. Place a stop loss below the low of the chart pattern.
Sell Signal: Initiate a sell order when the candlestick breaks and closes below the Flag and Pennants chart pattern. Place a stop loss above the high of the chart pattern.
Trade Exit: Use your own method of trade exit.
Flag and Pennants Forex Strategy with Zero Lag MACD
This MT4 strategy combines the Flag and Pennants Metatrader 4 Forex Indicator with the Zero Lag MACD Indicator for MT4.
It is built for traders who want clean pattern confirmation together with momentum analysis.
The Flag and Pennants indicator scans and displays flag and pennant patterns directly on the chart.
The Zero Lag MACD shows bullish momentum when the MACD is above the zero line and bearish momentum when it is below.
Together, they offer a simple approach that suits beginners and experienced scalpers or day traders.
You can trade it on M5, M15, M30 and H1 charts. The rules are easy to follow and help filter weak breakouts.
Buy Entry Rules
- Wait for the Flag and Pennants indicator to detect a bullish flag or bullish pennant.
- Price must break above the upper pattern boundary.
- The Zero Lag MACD histogram must be above the zero line at the moment of the breakout.
- Place your stop loss a few pips below the opposite side of the flag or pennant.
- Set your first take profit at 1 to 1.5 times the pattern height.
Optional second target: let the trade run while the MACD stays above zero.
Sell Entry Rules
- Wait for the Flag and Pennants indicator to detect a bearish flag or bearish pennant.
- Price must break below the lower pattern boundary.
- The Zero Lag MACD histogram must be below the zero line at the moment of the breakout.
- Place your stop loss a few pips above the opposite side of the pattern.
- Set your take profit at 1 to 1.5 times the pattern height.
For extended targets, hold the trade while the MACD stays below zero.
Advantages
- Clear chart patterns help avoid blind breakout trading.
- The MACD filter reduces false moves and low momentum entries.
- Works well on most liquid forex pairs.
- Fits scalping and day trading styles.
- Simple rules make it easy to follow.
Drawbacks
- Patterns do not appear during all market conditions.
- Strong news events can invalidate nice setups.
- The strategy needs patience because some flags take longer to form.
Case Study 1
On EURUSD M15, a clear bullish flag formed after a strong 35 pip impulse move.
The consolidation tightened and held for about fifteen minutes.
When the price finally broke above the upper boundary, the Zero Lag MACD stayed above zero and confirmed bullish momentum.
A buy entry was taken at 1.0885.
The stop loss was placed at 1.0870, which was 15 pips below the structure.
The first take profit was set at 1.0900, equal to the height of the pattern.
Price reached this target within the next six candles for a clean 15 pip gain.
The remaining position continued to rise while the MACD stayed above zero.
The second target was reached at 1.0912 for a total of 27 pips on the runner.
Case Study 2
On GBPJPY M30, a bearish pennant formed after a sharp 60 pip decline.
Price consolidated inside a tight triangle, and volatility slowed.
The breakout came when the price pushed below the support line while the Zero Lag MACD was still below zero.
A sell entry was triggered at 188.40.
The stop loss was placed at 188.60, which was 20 pips above the pattern.
The first target was 188.00 based on the pennant height, giving a quick 40 pip profit.
Momentum continued, and the MACD stayed firmly negative, which allowed a second target.
The runner closed at 187.60 for an additional 40 pip gain.
Strategy Tips
- Trade only well-defined flags and pennants with clear boundaries because these patterns provide more reliable breakouts.
- Confirm momentum with the Zero Lag MACD and avoid entries when the histogram is flat around the zero line.
- Wait for a full candle close outside the pattern before opening a position to avoid premature breakouts.
- Skip trades during low liquidity sessions because weak volume often leads to small and unreliable breakouts.
- Choose pairs with consistent intraday movement, such as EURUSD, GBPJPY or GBPUSD.
- Review completed trades to understand which pattern shapes perform best on your preferred time frame.
- Keep stops outside the pattern structure to avoid being triggered by normal consolidation noise.
Download Now
Download the “flag-and-pennant-patterns.mq4” Metatrader 4 indicator
MT4 Indicator Characteristics
Currency pairs: Any
Platform: Metatrader 4
Type: Chart pattern indicator
Customization options: Variable (channel period, slope period, flag pattern factor, pennant pattern factor) Colors, width & Style.
Time frames: 1-Minute, 5-Minutes, 15-Minutes, 30-Minutes, 1-Hour, 4-Hours, 1-Day, 1-Week, 1-Month
Type: flags | pennants
