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Flag trading the trend

  • #2,401
  • Mar 30, 2011 4:56am Mar 30, 2011 4:56am
Hi Moonwen

it should pull back to the SMA it does not need to cross it, you will know if the pull back was not enough as the rule regarding the high/low of the setup bar not within 2.4 of the SMA will keep you out of invalid pull backs

Regards
John

Quoting Moonwen
d4n your chart is perfect for a question:
is it still a valid pull back if it doesn't go beyond the SMA 10?
  • #2,402
  • Mar 30, 2011 5:03am Mar 30, 2011 5:03am
Many thanks, very clarifying
  • #2,403
  • Mar 30, 2011 5:20am Mar 30, 2011 5:20am
could be another bite of the cherry coming up but be careful as eu seems a little unsure at the mo and its getting a little late.
  • #2,404
  • Mar 30, 2011 5:51am Mar 30, 2011 5:51am
I guess you refer at this.
Is there any technical reason not to enter this trade, like the candle too long or something that I'm missing?
Thanks as usual
Attached Image (click to enlarge)
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  • #2,405
  • Mar 30, 2011 5:58am Mar 30, 2011 5:58am
Quoting Moonwen
I guess you refer at this.
Is there any technical reason not to enter this trade, like the candle too long or something that I'm missing?
Thanks as usual
No technical reason but for the past few days we dont really have a clear overall direction plus price coming up to previous support so we were right to be cautious with that one.
  • #2,406
  • Mar 30, 2011 5:59am Mar 30, 2011 5:59am
I have this as still being in an uptrend, I guess that I still
have a lot to learn
  • #2,407
  • Mar 30, 2011 6:00am Mar 30, 2011 6:00am
Quoting Moonwen
I guess you refer at this.
Is there any technical reason not to enter this trade, like the candle too long or something that I'm missing?
Thanks as usual
I did, got about 1.5 pips but I was quick........
Attached Image (click to enlarge)
Click to Enlarge Name: eur.usd.3.30.11a.gif Size: 142 KB
Canadian by birth Australian by choice
  • #2,408
  • Mar 30, 2011 6:05am Mar 30, 2011 6:05am
Quoting d4n
No technical reason but for the past few days we dont really have a clear overall direction plus price coming up to previous support so we were right to be cautious with that one.

i actually wanted to exit the trade imidiately i see the pin bar. i knew it that was the end of the wave 5 but i did not want to loss few pips and it hits my stop. that a lessen for me.
  • #2,409
  • Mar 30, 2011 6:11am Mar 30, 2011 6:11am
Quoting dortFX
i actually wanted to exit the trade imidiately i see the pin bar. i knew it that was the end of the wave 5 but i did not want to loss few pips and it hits my stop. that a lessen for me.
yep, lots of reasons to get away from that one really... if in doubt stay out
  • #2,410
  • Mar 30, 2011 6:13am Mar 30, 2011 6:13am
Quoting alright
Hi rcwso. I thought I would clarify something on your pdf as I made an SS according to your rules and then realised there's was something not matching.
If you look at the pics that's my view for placing orders, because if, for longs, we use the blue lines, i.e. the bid price, that doesn't account for spread and we risk to be in although the price doesn't show on the chart to have reached 1.4011, to follow your price example. To explain better, if we place an order at 1.4011, it would be filled when the price is 1.4009 on the chart. Then if the...
The entry price on the long example is based on the BID price as listed on the example. Therefore it was hit on the BID chart and it did take into account the spread. The same for the short. Look at the wording on the previous slides in the pdf and that explains all the math. I had several other people read this and did the math many times. It adds (or subtracts) correctly for me to get a 1:1 risk/reward system.

What doesn't add up for you?
  • #2,411
  • Mar 30, 2011 6:14am Mar 30, 2011 6:14am
Quoting MeLe
I have this as still being in an uptrend, I guess that I still
have a lot to learn
So, how does one determine the trend? I managed to listen to 1 of the webinars (very poor connection here) and Divergence (I believe that's him, right) mentioned drawing a line, and if it was above the line he was taking long trades or the other way around.

So, how to draw the line(s)? Seems to me you need 2 lines, hence you are always between 2 lines, can't sit there all day and say I'm not bullish till it goes up, or I'm not bearish till it goes down.

See example, looks like down trend, but isn't that a long trade set up there?

Thanks, John
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Canadian by birth Australian by choice
  • #2,412
  • Mar 30, 2011 6:18am Mar 30, 2011 6:18am
Quoting d4n
yep, lots of reasons to get away from that one really... if in doubt stay out

thank you for the advice


it is like the market is in a range
  • #2,413
  • Mar 30, 2011 6:20am Mar 30, 2011 6:20am
Hi Snowman, I have the AUD/USD as being long so yes that would be a valid entry,
but I feel that I am not experienced enough to to sure
Regards
MeLe
  • #2,414
  • Mar 30, 2011 6:26am Mar 30, 2011 6:26am
Quoting MeLe
Hi Snowman, I have the AUD/USD as being long so yes that would be a valid entry,
but I feel that I am not experienced enough to to sure
Regards
MeLe
The overall trend on AU is definitely up

You will always have counter trend signals you just have to trade with the opinion that trades that are with the overall trend have a higher probabilty of succeeding so adjust your risk accordingly. And when overall trend is unclear as EU is now again use extra caution.
  • #2,415
  • Mar 30, 2011 6:34am Mar 30, 2011 6:34am
Quoting MeLe
Hi Snowman, I have the AUD/USD as being long so yes that would be a valid entry,
but I feel that I am not experienced enough to to sure
Regards
MeLe
AUD/USD long, for sure, all time highs, so I will remove the top line and only draw the low line at recent swing, thanks for answer, now to figure out the EUR/USD
Canadian by birth Australian by choice
  • #2,416
  • Mar 30, 2011 6:48am Mar 30, 2011 6:48am
Yes I am having problems with the EU but will persist, in long EJ at present
  • #2,417
  • Mar 30, 2011 7:06am Mar 30, 2011 7:06am
Quoting TheSnowman
AUD/USD long, for sure, all time highs, so I will remove the top line and only draw the low line at recent swing, thanks for answer, now to figure out the EUR/USD
The all time high for AUDUSD was in 1982 at 1.0333
Your Attitude Determines Your Altitude
  • #2,418
  • Mar 30, 2011 7:17am Mar 30, 2011 7:17am
Quoting forexnutter
The all time high for AUDUSD was in 1982 at 1.0333
Oh yeah, now I remember, every time I go overseas and make US $$$$, the Aussie goes up!

In the '80's I was in Scotland (North Sea), now I been in Saudi Arabia from 2002, and getting a pay cut every month since, due to exchange rates
Canadian by birth Australian by choice
  • #2,419
  • Mar 30, 2011 7:18am Mar 30, 2011 7:18am
Quoting Rcwso
The entry price on the long example is based on the BID price as listed on the example. Therefore it was hit on the BID chart and it did take into account the spread. The same for the short. Look at the wording on the previous slides in the pdf and that explains all the math. I had several other people read this and did the math many times. It adds (or subtracts) correctly for me to get a 1:1 risk/reward system.

What doesn't add up for you?
It's what u can see in the pics I posted. For setting up long orders you said to use the blue lines and for short the red lines. I highlighted what the levels to go in the ticket order should be instead. Hope that explains my thought. On post #2334 I attached a spreadsheet to get such levels automatically. Do you mind having a look?
  • #2,420
  • Mar 30, 2011 7:44am Mar 30, 2011 7:44am
Quoting alright
It's what u can see in the pics I posted. For setting up long orders you said to use the blue lines and for short the red lines. I highlighted what the levels to go in the ticket order should be instead. Hope that explains my thought. On post #2334 I attached a spreadsheet to get such levels automatically. Do you mind having a look?
The levels I put in their are according to how a trading platform triggers trades for entry and exit. It is always entered on the BID price and therefore you have the spread against you from the ASK price at the start of the trade.

So in my long example, you enter on when the BID price is hit one pip above the high of the set-up candle. Now the ASK price is your spread and you are down 2 pips in that example. The take-profit needs to be set off of the BID price as well because that is when the trade will be terminated. Therefore the trade will have moved the total pips you want for your take-profit reward. In the example it is 18 pips calculated from the low of the swing low to include the spread. You use your stop loss as the BID price as well because that is when the trade will be terminated. Therefore if you do the math it is an 18 pip take profit and 18 pip stop loss. Risk/Reward 1:1.

Looking at your math in the long example on your chart it looks like you add the spread to the buy price. The buy price is off the BID price. You don't add the spread at that part of the calculation. That causes your stop loss to be correct because you have to account for the spread. But it causes your take profit to be wrong because you use 18 pips added to the entry price which in reality is 1.4011 not 1.4013 for the calculation.

Realize, when you hit execute on the trade it is executing off of the BID price. For a long trade, as explained in the pdf your trades are executed and stopped based on BID prices.

I am not sure how else to explain this but I feel that you are adding the spread in your calculation for the enter price when that is not the case. You need to add the spread when calculating where to put the stop loss which will be a BID price on your chart.

Does that make sense? Look at my math again and read the words on the page prior to the example. That should explain it a little as well. Also read the word on the example. It tells you how far it needs to travel and why.

Anything else?
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