Say you are following a stock in a nice strong uptrend over the last few months, and it is now in a high and tight flag formation. Do you buy as soon as the upper trend line is penetrated intra day, or do you wait for it to close over the line? Do you wait for a pullback or do you "chase" it up?
First, I don't have experience trading flags, but here's what the Bulkowski's book says: Out of 144 flags, 130 were consolidations and only 14 were reversals. Sixty-three percent meet the target price (avg price in flag - price at start of trend). Sounds like it's a good idea to go for the intraday breakout. If you wait for it to close outside, just keep in mind the added risk-- if that's still OK for the situation, i'd still go for it. Chase: again, just re-evaluate risk vs reward, using the target price (flag - start of trend). As usual, the answer depends on the account, trade size, and the person. Maybe you have a chart you can post.
As you know, a properly drawn pattern contains the price action within. Sometimes a very early minor penetration is allowed, but if a penetration occurs later in the pattern without closing outside the pattern, then the pattern needs to be redrawn. If you think about it, the amount you give up by not getting in right as the boundary is crossed, is small compared to the profit potential of the trade... or should be. But one sure way to find out is to go back over your charts and see what would have happened had you waited for the close or entered intraday.