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Flag trading the trend

  • #2,741
  • Apr 6, 2011 8:56am Apr 6, 2011 8:56am
Diamond, did you see divergence on GU, i'm trying to get better at spotting the div and 123's
  • #2,742
  • Apr 6, 2011 9:01am Apr 6, 2011 9:01am
Quoting diamonddbw
123 setting up on G/U right now.
++++++++++++++++++++++++++++++++

Six minutes - 13 pips.

• Trend - Up
• 40+ bar Divergence
• 123 set up to return to trend

I did pull the plug 2 pips early because of significant resistance (junk in the trunk) @ 1.6284'ish.
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  • #2,743
  • Apr 6, 2011 9:08am Apr 6, 2011 9:08am
Quoting bootsyjam
@ Diamond,
Am v interested to see your analysis, I've entered before the 1-2-3 completes (at least I think I have) thanks to divergence showing on my 8,2,2 stoch, the trigger going on the cci, and the fact that it's near (well, just under) prev support.
So do you wait for this trade to 1-2-3? Also, where do you draw your TL from/to, have 2 different kinds showing on my chart. Are you waiting for the retrace down, and then waiting to go long with the cci trigger?
Blue arrow shows cci trigger.

Update. Exited at profit for 1/1.5 RR
++++++++++++++++++++++++++++++++

You animal. You got more pips than me. That is so not cool!

Tried to pm you, but for some reason it's not permitted. Do you know why?
  • #2,744
  • Apr 6, 2011 9:14am Apr 6, 2011 9:14am
thanks Diamond, i need to look further back, been too short sighted
good trade, congrats
  • #2,745
  • Apr 6, 2011 9:14am Apr 6, 2011 9:14am
haha no, I've no idea why it doesn't work!
I tried to trade with the MA onscreen but it just muddles my thinking, means I can't see the wood for the trees etc.

Drawback of this method, sometimes the cci signal is a bit delayed, EURGBP 5 min chart is great example right now. I wouldn't enter this trade with the trigger with such a wide SL, and therefore, such a larger amount of pips needed, to make a 1:1 RR. What do you think?
damn it's just taken off....
  • #2,746
  • Apr 6, 2011 9:20am Apr 6, 2011 9:20am
The Div long worked on the Eur as well....peckers slipped me 3.4 pips when I closed it. Nice trade on the GBP Diamond.
  • #2,747
  • Apr 6, 2011 9:32am Apr 6, 2011 9:32am
Quoting bootsyjam
Apologies, I know this system is just for EURUSD but I use it on other pairs.
Missed EurUSD signal as was faffing around. Here is EURGBP buy setup, and exit, for 1:1 RR profit. Price continued higher.

Note the blue arrows showing the trigger candle-entry was made at the middle blue line, exit for profit was made at the top blue line.
There was divergence showing on my stoch indicator (find it easier to see divergence on this than on RSI-is v similar readings though).

Also, I'm more aggressive with my stops, and put it underneath the trigger candle...
++++++++++++++++++++++++++++++++
imho, I would almost never trade the e/g using this system. The volatility is not there.
Also, I would not have traded in that "crowd" of bars. What I mean is when I see alot of consolidation, I simply will not trade there. Looking to the left of your e/g chart is alot of traffic congestion. Just like right now, when I choose the GU over the EU. If you look at EU chart, price was in heavy traffic and had been for most of European session. GU price had fallen below it's moderate area of traffic (btw-traffic is interchangable with consolidation, just easier to write) and exhibited to me, more fluid looking movement.

Once again, this is just the way I see it. And, like all people, I was born with the inalienable "Right to Remain Stupid".
  • #2,748
  • Apr 6, 2011 9:38am Apr 6, 2011 9:38am
Thanks for the feedback Diamond.

Know what you mean r.e. trading in congested areas, the thing that swung it for me was the divergence on the 5min chart. I'll always enter on those, especially if with the trend+near S/R levels+is correct time of day (when traders are at their desks).
Have posted my chart to show you what i mean. Vertical lines show the CCi trigger.
Apologies for not using RSI/Divergence indicator, don't mean to confuse the thread. I'm just used to looking for divergence on stochs, that's all, it's the same principle.

Hmmm, how about that early profit taking on GBUSD.....
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  • #2,749
  • Apr 6, 2011 9:53am Apr 6, 2011 9:53am
Hmmm, how about that early profit taking on GBUSD.....[/quote]
++++++++++++++++++++++++++++++++

I explained that about 5 pages back. "Cowards run on this thread". lol

Normally I would have waited for full 1:1. However, in this case I saw significant resistance @ the 84 level (I have a black line on my chart at that level, which is a s/r line for sometime now) which included very recent s/r.

When price shot up to within 2 pips of my target at a fast rate, I closed it out, not wanting to see price go south quickly as well. This time of day the gbp will act a fool and do all sorts of wanky movements. For now, this works for me.
  • #2,750
  • Apr 6, 2011 10:26am Apr 6, 2011 10:26am
Watching EU for possible 123 reversal counter trend. There is no divergence yet.

However the Euro has exceeded it's 5 day average range, which improves the chances of a reversal.
  • #2,751
  • Apr 6, 2011 10:30am Apr 6, 2011 10:30am
Agreed Diamond, the 84 level was solid resistance. If the chart had been a bit clearer, with a bit less resistance to the left of the price, I'd have been tempted to let it run longer. As it happened, formed a (wonky)cup and handle and continured higher, but could easily have failed around those levels and continued down.
Trading with the trend, trading with divergence, and trading off SR levels with the CCI is a VERY nice way to trade. Stops me from entering too many trades too

I wouldn't have picked EURUSD this afternoon, really didn't like the look of it at all, despite it coming down to a support level from the morning trading....

In fact, I think I've identified when I'm uncomforatble entering a trade and would be grateful to know if anyone else feels the same. If all conditions are met, and the price is now returning to the trend, and the cci triiger goes. You enter long when the high of the trigger candle is broken-using EURUSD this afternoon as an example as that's what we're supposed to trade, I felt that 3/4 candles into the reversal with the trend, was just too late to be going long. I suppose i like to be closer to when the price turns-do people just ignore this and enter anyway?
Certainly makes more sense if placing SL under the swing low, and with a 1:1 RR
  • #2,752
  • Apr 6, 2011 11:05am Apr 6, 2011 11:05am
In fact, I think I've identified when I'm uncomforatble entering a trade and would be grateful to know if anyone else feels the same. If all conditions are met, and the price is now returning to the trend, and the cci triiger goes. You enter long when the high of the trigger candle is broken-using EURUSD this afternoon as an example as that's what we're supposed to trade, I felt that 3/4 candles into the reversal with the trend, was just too late to be going long. I suppose i like to be closer to when the price turns-do people just ignore this and enter anyway?
Certainly makes more sense if placing SL under the swing low, and with a 1:1 RR[/quote]
++++++++++++++++++++++++++++++++

The entry rule is to exceed the set up candles "Closing" by 1 pip, not the high/low.

On this question/statement, you totally lost me. I don't know what 3/4 means: (I felt that 3/4 candles into the reversal with the trend, was just too late to be going long. I suppose i like to be closer to when the price turns-do people just ignore this and enter anyway?)
  • #2,753
  • Apr 6, 2011 11:22am Apr 6, 2011 11:22am
Quoting diamonddbw
Watching EU for possible 123 reversal counter trend. There is no divergence yet.

However the Euro has exceeded it's 5 day average range, which improves the chances of a reversal.
++++++++++++++++++++++++++++++++

While I'm sitting in this EU 123 trade, I'm thinking I may have to wait around for an hour or so while this thing gets sussed out.

I've noticed (or I think I've noticed) that usually between 1:15 & 1:30 NY time there seems to be a flurry of activity. I'm guessing it's the wall street boys returning from their 3 martini lunches (or other unspeakable indulgences), feeling a little froggy and going for the gusto, so to speak.

Has anyone else observed this NY mid afternoon phenomena?
  • #2,754
  • Apr 6, 2011 11:28am Apr 6, 2011 11:28am
Quoting diamonddbw
The entry rule is to exceed the set up candles "Closing" by 1 pip, not the high/low.
It is the high / low D not the close.
(post 107)
  • #2,755
  • Apr 6, 2011 11:55am Apr 6, 2011 11:55am
Quoting d4n
It is the high / low D not the close.
(post 107)
++++++++++++++++++++++++++++++++

I stand corrected. Could of swore that I heard Div talk about this on one of the webinars, and state to use the "Close" of the set up bar. But post 107 clearly states low/high of SUB. Do I get a spanking now?

Observing the price action around the closing price, it seems to me that this price is well respected by the following price bar. If price does not exceed the close, it's not going to be a viable trade. I painfully recall jumping the gun, more than once, much to my chagrin, to learn this lesson. For now I think I will continue along the path I've been using and take my entry one pip beyond the close, until the time where I find out that I'm taking to many hits.*

*I am not suggesting anyone else attempt this, because this clearly not in league with what Div has so eloquently laid out for us.
  • #2,756
  • Apr 6, 2011 12:04pm Apr 6, 2011 12:04pm
Quoting diamonddbw
While I'm sitting in this EU 123 trade ...
Hi could you post a chart .. I can't see a 123 EU trade

thanks
  • #2,757
  • Apr 6, 2011 12:34pm Apr 6, 2011 12:34pm
Quoting billm
Hi could you post a chart .. I can't see a 123 EU trade

thanks
++++++++++++++++++++++++++++++++

Here's the chart. I did trade this one also.
Red=Stop
Dark Blue=Entry
Green=Money

Note: My entries are not 100% Flag Rules and I'm not suggesting you deviate from the rules.

I did (once again) get out early. I clicked out at 12.3 pips profit, but got filled at 10.7 pips, as the market was moving quite rapidly.

Support from recent swing was @ 1.43165. When I saw price hit 1.43183 on my charts, and bounce, I closed it out. This late in the session, follow through is not guaranteed. As Div says, "Your account doesn't know the difference, profit is profit". This is now one hour later and price has not yet gone back down to test my exit price. Bottom line, I'm not losing sleep over 3 pips.

Hope this answers your question Bill
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  • #2,758
  • Apr 6, 2011 12:37pm Apr 6, 2011 12:37pm
Quoting diamonddbw
++++++++++++++++++++++++++++++++

I stand corrected. Could of swore that I heard Div talk about this on one of the webinars, and state to use the "Close" of the set up bar. But post 107 clearly states low/high of SUB. Do I get a spanking now?
Consider yourself spanked!

In all seriousness though for people trying to learn this system here's an example of why you need to read the rules over and over until you fully understand them..... and then read them some more!

This system works as it is and will make you alot of money if you master it. Master it as it is before you try to change or add anything.
  • #2,759
  • Apr 6, 2011 1:20pm Apr 6, 2011 1:20pm
Thank you, I can see your 123 now.

There was a similar 123 short earlier today that I think failed (I may be wrong). Can you comment if the setup was correct thanks
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  • #2,760
  • Apr 6, 2011 2:10pm Apr 6, 2011 2:10pm
Quoting billm
Thank you, I can see your 123 now.

There was a similar 123 short earlier today that I think failed (I may be wrong). Can you comment if the setup was correct thanks
++++++++++++++++++++++++++++++++

It does look like a likely spot for a 123 reversal.

I don't see any divergence. Myself I probably would have watched it for a awhile and then taken note of the news coming up. Although the news was for the gbp, during the London session the euro & gbp tend to not correlate the same way as they do during other sessions.
After awhile, I would have probably let it go because it was taking too long to set up. Most of the 123's I've seen, get it done in 5-8 bars. That's just my thoughts. Please consult crystal ball for the Correct answer.
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