Flag trading the trend

Hi Div,

Which out of the two is correctly marked? Sometimes, when there are a lot of tops/bottoms around the same level, I get slightly confused about how to mark.

lots of entries today somebody made money

Agree.

divergence give us a ferrari, we just nee learn to drive it.

just read the manual and follow the maps

Hi Div,

Would appreciate your opinion on post #801

Div would you trade these two setups?

Are you looking for hidden divergence? 123? What are you trying to do with those charts? Look for the down trend to reverse?

Just wondering.

yes, down trend to reverse. Am i doing smth wrong?

I am not an expert at finding the reversal of a trend. The first question I would ask is if you are trading the trend pullback trades and being successful at those. If not, then don't worry about the reversal trades. If the trend reverses, there will be pullback trades. Again, I have learned this many times lately trying to find too many trades.

If you are finding the trend pullback trades and are successful at those, why would you want to risk losing money on the much more difficult reversal trades?

Either way, Divergence's charts and posts explain it all the best anyone can. In the charts you have posted I don't see any 123 following the divergence you are showing. Also, divergence on a chart does not mean a reversal will happen next. It is one of the signals that could lead to a reversal. Same with 123 following divergence. That does not mean for certain, 100% of the time that there will be a reversal.

That being said, again, your charts don't seem to have any 123 patterns. Also, if you look at when Divergence says a trend has changed, many times it is the previous HL or LH and not the 1st preceding one. Up until that point is broken, even with divergence and a valid 123, your are still counter trend trading.

Does that make sense? If I am wrong, let me know. Trying to learn from my very bad mistakes lately.

appreciate your reply. we all are learning here, and that's what i'm trying to do too. I wasn't trading those setups but just asking coz i don't quite understand when and how to use div+123 setup, which i want to grasp too

I understand. I would be nice to find the new trend and then trade the first pullback. I think I will have to wait a bit longer to learn all of that and use it.

For now, find the trend, trade the pullback. At least that is what I am trying to implement.

Show 123 indicator.

Hi you all...

just got to the last post after reading through the thread, setting up EURUSD5M chart and taking some trades on the way. Finally brought everything together - all those ideas that have been seeping in and suddenly the dimmer switch turned up to full light and Eureka, can see the price action.

Have written down all the rules (I hope) - already kept me out of trades and got me in to 3 winners. Now wait for the Asian session and more practice.

Thanks Divergence... be in touch but don't think I should need to ask questions as you have built up the system for us step by step. Let you know how it goes.

Hi

I just finished this trade, I have been at a funeral but am back trading

Although it is in a slower time it seemed to make sense

see chart below

Looks like the TP worked and I got out just in time, see horizontal red line

Chaps, I came across this info, for those of you struggling to work out whether price is trending thru price action alone, the following should help.

Good Trading...

PureSymmetry.

ps: Divergence, you're the freaking man!



Everything in nature is made up of building blocks. Just as the universe is made up of atoms, so the market is made up of basic units called Market Structures. And just as there are two basic part to an atoms - protons and electrons - so in the market there are two types of structures, Market Structure High and Market Structure Low. Most price movement in the market can be defined in terms of MSL's and MSH's, and the ranges that are found in-between them. Likewise, everything you find at enthios.com is, for the most part, defined in terms of MSL's, MSH's, and the building block that they form together, 1-2-3 Reversals.
Market Structure Low (MSL)

A Market Structure Low (MSL) is the first sign of a potential reversal in prices from a downtrend to an up trend. It is usually made up of three price bars (or candles): A low, a lower low, and then a higher low. The "Low" is measured from the actual low of the candle, not the closing price. Ideally, as shown in Figure1, the Low and Lower Low will both be "down" bars (where the closing price is lower than the open price), whereas the third bar, the Higher Low, will be an up bar.

Figure 1 - MSL
http://www.trading-naked.com/images/msl.gif

The MSL is actually triggered when prices subsequently move above the high of the third candle, as shown by the dotted line. Of course, it is dangerous to enter a long trade simply on the trigger of a MSL. But this book is filled with ample opportunities to use the MSL and MSH as triggers for different trades.
A MSL can also be made up of two bars or candles when they both have the same low. This is known as a double bottom, as shown in Figure 2. Again, ideally the first bar of the double bottom will be a down bar, and the second will be an up bar. In this example, the second is a doji (open and close were the same), which is neutral.
Figure 2: Double Bottom MSL
http://www.trading-naked.com/images/msl-double.gif

Market Structure High (MSH)

The opposite of a MSL is a Market Structure High (MSH). It is the first sign of a potential reversal in prices. A MSH is usually made up of three price bars (or candles): A high, a higher high, and then a lower high. The "High" is measured from the actual high of the bar, not the closing price.
Again, the MSH is triggered short when prices move below the low of the third bar in the MSH pattern.
Figure 3: MSH
http://www.trading-naked.com/images/msh.gif
1-2-3 Reversal Patterns

The next important building block is made up of MSL's and MSH's. Just as a MSL is the first sign of a potential reversal in prices, the combination of a MSL, a MSH, then a MSL that is higher than the first one, is a confirmation pattern that a down trend has reversed into an up trend. This is illustrated in Figure 4.
Figure 4: Upside 1-2-3 Reversal
http://www.trading-naked.com/images/123.gif
Note that the MSL trigger on the higher MSL is the first point of entry for a reversal trade, however the reversal is not confirmed until prices move above the high of the previous MSH.

hey pure sym other than the mystical stuff with market structure these diagrams are solid stuff. I have been trying to get this point across for a month some get it others dont but once they get it they will know if trend is up or down so whatever direction its trending they find the trend and wait for the pullback and then find the entry and make money i cant say it any simpler than that

trade just triggered

Thanks Mr Div..good to know I read that one right ...it's just got to get thru todays low now...

Hey symetrical Thanks for you response bro, to anyone willing to answer I have posted a chart and wanted some clarification on the trend and how to play it if it were to turn around and start a down movement, the questions are in the chart pic. Thanks to all who contribute to this thread to help all those that are trying to learn!