Flag trading the trend

As I understand it, the setup bar doesn't have to take out point 2 by 1 pip. Its high(longs)/low(shorts) has to be =< 2.4 pips (Div mentions 2 pips sometimes) within point 2. If it takes out point 2 then it's only better since the 123 is confirmed. It's more conservative that way, I think that classic 123 trading involves the confirmation that point 2 was broken.

If we go long on 123, then the high of SUB must be maximally 2.4 pips lower than point 2. If the distance between SUB high and point 2 is smaller, or the SUB high equals point 2, or it's even higher - it's ok. For shorts, the low of a SUB in relation to point 2 is what matters. Hopefully I'm not wrong; if I am please correct me and I shall delete this post to avoid spreading nonsense.

The most important thing, however, is: the 123 pattern has to be CLEARLY DISTINCTIVE - example see this d4n's post - if there's divergence right before (on point 1) and it happens at the end of a 5-wave move, then it's the ONLY countertrend entry that's worth considering, at least for me.. there may be other setups not requiring the whole sequence with enough experience. It has been said many times in this thread, CT trades are optional. Stick with trend (flag) trades. And IF going countertrend at all (optional) taking only the very very best looking setups is the way to go.

Just took this flag trade on GU, along with a few other people in the IRC channel.

http://img62.imageshack.us/img62/7280/123gk.png

So far with this method: 3 trades, 3 wins.

Looking good.

hey tas0s nice flag trade, congrats! ..it seems you don't add spread to your target, you HAVE to if you want to get 1:1R, see attached pdf by rcwso, (pages 9-12) for the math.

Good morning.

Wish to have a feedback on this one. What do you all think about this setup? Would you guys take this trade in presence of divergence, or not? I think we have a countertrend right now, trend is still bullish. I just standed by.

EDIT: To be honest, I was rather expecting the last swing to be taken out...

1,4657 is the current support. The swing might be taken out during overlap - but let's see what happens.

Thanks for sharing this method Div.
USD/CHF long. Intraday trend up so was looking for a long. +10 pips.

A couple of things to look at and consider.

First, I don't show a valid setup bar anywhere on that 123. The bar you might be considering is too far away from the sma.

Second, the setup bar never gets executed until about 5 bars later which is too late. The bar directly after doesn't go 1 pip above your setup bar.

In my book, this would not have been a valid div/123.

Got it, thanks for the clarification to all that responded.

Another good day for me. I only managed to find two trades. 1 win and 1 be. However the 1 be did go onto hit my target a few candles later, I just couldn't hack the price action before it. Once I got in price immediately retraced, came within 1 pip of my stop then trickled back up to be where I got out. It then continued in this area for a few more bars before eventually breaking out and hitting what would have been my target.

I think I can see now that my biggest challenge is going to be sticking with the trade. Because the first sign of trouble makes me a little nervous and I start looking for any reason to exit...

Anyone have any suggestions on a cure my condition :-)

Oh and by the way Olarion really seems have this down! Watching him is really quite a learning experience by itself!

[quote=PipRiderFX;4575576]Another good day for me. I only managed to find two trades. 1 win and 1 be. However the 1 be did go onto hit my target a few candles later, I just couldn't hack the price action before it. Once I got in price immediately retraced, came within 1 pip of my stop then trickled back up to be where I got out. It then continued in this area for a few more bars before eventually breaking out and hitting what would have been my target.

I think I can see now that my biggest challenge is going to be sticking with the trade. Because the first sign of trouble makes me a little nervous and I start looking for any reason to exit...

Anyone have any suggestions on a cure my condition :-)

I'm afraid there's no known cure at the moment piprider lol,but u did make me chuckle....
Seriously though if you're not reasonably relaxed while in a trade you will just do as you say and bail out.
As you get more successful and experienced it will get easier.
Try trading with smaller lots until you build your confidence

Happy pipping

[quote=richyrich;4575844] great advice RR

hey guys sorry for not posting of late birthday not feeling well etc and joel would say thats my story and i am sticking to it. Well this has been the toughest month for me since april 2008 the lack of setups during my 2 sessions has me wondering and such to maybe add a few pairs as backup to generate some more trades if this continues. There have been tradess just not in my time zone this is the london session month. I am looking at this basket besides eurusd the audusd aud jpy eurjpy and the gbpusd that should at lkeast get me 1 trade a day i hope or at the least 1 every other day which would be fine. Bottom dollar is not losing any money but...... not making any either. It will turn and come back to normal it always does YO JOEL

King Loel is in London for thr royal wedding

Hi, you all...........just practicing my accent. Hi Div. Hi Guys...................
Just back from England......I've asked the Royals to tone this wedding down abit.....I don't think they'll listen though, although I said I'd reek havoc on the Pound if they didn't..............

How did you know?

Hi D, with those pairs u are thinking of adding have you done any back testing on them to determine their suitability?

in the process

silence is golden any thoughts from the crowd

The numbers have thinned the last few days...

div--not a big fan of the chf, i guess, good crowd in the trading room during ny session, u'll get all the feedback u want if u stop in.