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Breakout
Which move is a flag breakout continuing?
Flag breakout · Flag continuation
What it bets
After a sharp leg, a tight consolidation leans slightly the other way, and when that consolidation breaks, the original direction continues.
How the rule is written
First there is a clear impulse leg. Then there is a narrowing channel or a small rectangle. Then the consolidation breaks in the direction of the impulse. Without the impulse in front of it, a sideways patch is not a flag.
When it fails
The consolidation lasts too long, or price returns inside it after the break. The flag has then become a top or a bottom, not a pause in the middle.
Do not confuse it with
A VCP stresses pullbacks that get smaller each time, and it can do that without one isolated flagpole. An inside bar only compares two neighboring bars. It does not require an impulse.