Flag trading the trend

a2xm the 1st trendline in no good we are still in uptrend the second and third trendlines were fine

the 1st one still in uptrend? based on what? thanks..

HH HL my mistake a2xm it did take out low and pullback so first entry is correct but that would make the next 2 incorrect since we are in a downtrend

a2xm here is a chart on aususd showing that

if no other question gnite

Hi Divergence or anyone who can help.

Last Friday at 9.40am EST I thought I saw this was a valid FLAG BO (UP) at this particular point marked X. Prices closed outside trend-line and CCI was above 50 and MA above 10MA.

Prices did come off after the BO and would have stopped me out.

Eventually the price action went to form a large triangle and BO to the upside.

Just trying to get a handle on this system.
Thanks

Divergence,

I have traded for over 6 years and must say this system of yours is astounding in its simplicity and profitability. You probably get few inquiries because it is virtually self explanatory!

Carmel

re your post the only explanation i can offer is that you were buying after a massive 140 pip move. There is a reference in an earlier post to not taking any positions after a move of that magnitude. Otherwise your read of the trade was correct.

When there is an ultra wide up/down bar on ultra high volume - it is usually an indication of weakness if an upbar and strength if a downbar.

Because of this, until the top (of up-bar) or bottom (of down-bar) of the recent ultra-high volume bar is taken out trading the pullbacks will not be high probability entries.

Basically this massive volume bar must be tested - and often tested a number of times before the market resumes trending.

I think sarythsaya said it already. I believe Divergence recommends to keep it simple, that includes being wary of very large candles.

My thoughts after this candle would be : no trade, wait what happens :

a) profit taking of buyers - smaller retrace only if buyers/demand still present.

b) what time of day does this occur, maybe news driven candle ( higher risk )

c) it`s not just the CCI or MA telling us, but price and trend/no trend/unusual spike up or down, wave sequence of higher highs and lower lows etc. that give us main clues.

For me I want to follow Div`s way of trading low risk, so unusual candles keep me away, especially if I missed an entry earlier before that happened.

In my experience and looking at charts with this method, it is really not necessary to jump in high risk after such a huge candle.

The major pairs traded at session opens ( or what Div recommends ) offer all opportunities to participate in the REGULAR trend moves for the day.
That makes trading less exciting, but probably more profitable in the long run.

Hope that helps.



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michael

Good morning traders

Cable long - similar pattern in AUDUSD, and other long trades in EURUSD & NZDUSD and USDCAD short.


George

for those still not clear about divergence trade that is triggered by 123 pattern heres a classic my edit justin already figured it out good job man

Cable short

not my time zone or pair but yes that was a great setup on gbpusd that was an easy win

Didn't that also setup in the E$, but it just hasn't followed through?

Hi Div,

Would like to know your opinion regarding the setup below. The second chart shows the zoomed out version of the same. The horizontal red line was broken before the flag formation, hence took the short side.

Thanks to Divergence as God used you to improve my trading and confidence with your simplified method of trading. I have been a fulltime trader for almost 15 months now and consistency has been added to my trading since last week that I came across this thread.

I should not be greedy and should call it a day now - just closed short @ 6268. See you nice folks later.


George

sujith it looks viable to short there

Thanks Div.