Now, Our core assumption is - It will eventually give a breakout (or, breakdown) and will continue the trend. So, in short, is a trend continuation pattern that allows you to catch a trend in the middle!
If We revisit the recent amazing Uptrend of Wipro , You can see there are three clear Flag Formations in the W timeframe.
What we should note here is - The first flag kept going upside. The second flag retraced. The third flag made a converging pattern.
In the end, it kept continuing the trend! If we summarize using Bounce theory, the flag is basically giving more structural formations of Higher Highs and Higher Lows.