There are many meanings and symbolics of buddhist flags. I saw many of prayer flags hung on the trees and other places inside Swayambhunath stupa and Boudhanath stupa in nepal. It looks very beautiful. Apart from the temple, monastery, big stupa it also can be hung in our place as well.
How, when and where it should be hung
Tibetan prayer flags were originally used as talismans to protect Tibetans during times of war. Originally the Bon people used prayer flags for protection, and put symbols such as the snow lion, the dragon, or a tiger on each flag. Tibetan prayer flags were eventually adopted into Tibetan Buddhism with prayers or messages of hope and peace written on each flag.
The symbolic of the five elements, five meditation Buddhas and five wisdoms.
The colors of Tibetan prayer flags are significant because they symbolize each of the five elements. Blue stands for the ether, or wind element. The white flag symbolizes air, and the red flag stands for fire. The green and yellow flags symbolize water and earth, respectively. The five colors of Tibetan prayer flags represent the five directions, (North, south, east west, and center). The five prayer flags also represent the five meditation Buddhas, and the five wisdoms. The five wisdoms are compassion, harmony, wisdom of sight, kindness, and perfect wisdom.
Symbols on prayer flags include prayers for wealth, wisdom, and health, or the eight auspicious signs. Many prayer flags also depict mantras, such as the Tibetan Buddhist mantra, Om Mani Padme Hum.
Where and when it can be placed
Prayer flags can be placed inside of a room in your house, and traditionally they were placed outside of houses as well. Around the frame of a doorway is a lovely place to display your prayer flags. The most auspicious time to hang prayer flags is during the Chinese New Year season. Prayer flags are also hung during times of great happiness, such as a birth, or times of great sadness.
Prayer flags should always be placed in a high part of your house, such as near the ceiling or between flag poles outside. Prayer flags should be hung in the right order, starting with blue from left to right. The actual hanging of your prayer flags should be a momentous occasion, and you can invite family and friends over and hang the prayer flags together. Tibetan Prayer flags above all symbolize peace and harmony with our friends and family, and with the greater universe.