What is Flag Limit in Trading?

[Ali]

The flag limit is an area on the candlestick chart where the price is trapped between two points, and the breakout of one decides the future market direction. It is also known as the decision point because market makers decide the future direction.

Flag limit or FL is also represented in the form of rally base rally and drop base drop on the candlestick chart When these two patterns form at previous support or resistance levels. 

We use the flag limit's high and low to draw the zone. This zone acts as a barrier to the price, holding it up or down. When the price engulfs the zone, the trend reverses and becomes invalid. Then, we cannot use it as a barrier. 
The high flag limit is called the upper flag limit, and the low flag limit is called the lower flag limit. 
After the formation of the flag limit, the first-time return of the price to FL is called FTB. we will mostly open trade on FTB. 

Example
Analyze the zone drawn on the image below and check that the flag limit is holding the price up. It does not allow the price to go down below the flag limit area. After many bounces from the FL zone, the price engulfed the zone, and then the trend reversed. 

We can use the flag limit zone to open a trade on the FTB or FTB1 or FTB2. However, we must confirm chart patterns like Quasimodo or three-drive patterns before opening a trade at the flag limit zone. 

There are many other important things within the flag limit zone, which I will explain in other posts. 
If you have questions about the flag limit, you can ask below by replying to this post.