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Nested bear flag: CHFJPY

Nested bear flag: CHFJPY

One of the nice things about swing trading is you can have resting orders, so your alert that a pattern has triggered is an order being filled.

Here’s a nice pattern to put in your trade plan: the nested flag. (I came up with that name years ago, and I still don’t love it. If someone has a better name, feel free to suggest lol.)

A nested flag is a small pause in a break from a larger flag. This gives us a few things:

  • A clean pattern (usually) for entry
  • Defined risk
  • Better expectation because it works “within” the flow from the larger pattern. The breakdown of the smaller pause is another check and confirmation in the trade’s favor.

You can read about the trade concept here. If you’d rather watch a video, I discuss the pattern in this video.

Good, high probability pattern for a short entry. We see these a bit more often on daily charts, but you’ll find them intraday as well… this is also a pattern that works just as well in stocks, currencies, and commodities.


Adam Grimes has over two decades of experience in the industry as a trader, analyst and system developer. The author of a best-selling trading book, he has traded for his own account, for a top prop firm, and spent several years at the New York Mercantile Exchange. He focuses on the intersection of quantitative analysis and discretionary trading, and has a talent for teaching and helping traders find their own way in the market.
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