Structure

Two parts:

1. Flagpole

1. Sharp, explosive move upward with high volume
2. Strong momentum — usually a single or few large candles
3. The bigger the pole, the stronger the eventual breakout

2. Pennant

1. Price consolidates in a symmetrical triangle
2. Upper trendline: descending — lower highs
3. Lower trendline: ascending — higher lows
4. Both lines converge toward an apex
5. Volume contracts significantly during this phase

Why It Works

The pole shows explosive buyer momentum. The pennant is price digesting that move — bulls and bears are in temporary equilibrium, but volume is drying up meaning sellers are losing conviction. When the triangle breaks upward, trapped sellers panic and fuel the next leg up.