TRADING FLAGS...
Text book tells you flags are bullish, (in reality flags fail as much as they continue)
I love to trade failed flags..
You must wait for a Flag failure to have a low risk trade... Once you see the failure.. you can choose optimal place to enter..
The trade works because everybody is getting long at the top... and the break down provides and area to trap those traders.
important to see a spike back into your entry area... A slow grind back into entry area will often grind past your low risk area.. (I call it blowing a load into entry area!)
Best used on 15M + time frames
Dangers:
1. news.. If close to a big news release you probably should wait and not take a flag signal
2. Change of session.. If Asia London or USA is about to open the change in volitiity can make flag signals fail.
3. Real old flags from 2 days ago or more.. interday traders may put orders at a failed flag.. and if they don't hit by end of day pull the orders..
4. 2 flags in same spot.. This would be like a double top.. and market would want to get above to run stops..
Flag formation trade not set up yet waiting for failure
Flag trade example
Text book tells you flags are bullish, (in reality flags fail as much as they continue)
I love to trade failed flags..
You must wait for a Flag failure to have a low risk trade... Once you see the failure.. you can choose optimal place to enter..
The trade works because everybody is getting long at the top... and the break down provides and area to trap those traders.
important to see a spike back into your entry area... A slow grind back into entry area will often grind past your low risk area.. (I call it blowing a load into entry area!)
Best used on 15M + time frames
Dangers:
1. news.. If close to a big news release you probably should wait and not take a flag signal
2. Change of session.. If Asia London or USA is about to open the change in volitiity can make flag signals fail.
3. Real old flags from 2 days ago or more.. interday traders may put orders at a failed flag.. and if they don't hit by end of day pull the orders..
4. 2 flags in same spot.. This would be like a double top.. and market would want to get above to run stops..
Flag formation trade not set up yet waiting for failure
Flag trade example
The only system that will work is one designed by and for yourself.
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