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Flag trading the trend

  • #2,781
  • Apr 7, 2011 3:15am Apr 7, 2011 3:15am
Nice divergence on EURUSD, also support ........NOW ... Wait for 123..!!!
" Support/Resistance is your friend .. and TREND your girlfriend .. "
  • #2,782
  • Apr 7, 2011 3:51am Apr 7, 2011 3:51am
Was in EurCHF and EURUSD long thanks to divergence, bounce off Support levels and CCI trigger candle highs being breached-have exited at small profit on both as is coming to 'dead zone' period of trading, at least I think it is. I get nervous if in a position and it's coming up to 10am (London time) as that's when volume (generally, not always), tends to dry up, so prices can fade away thanks to lack of activity. Oh yeah, big rate decsions at noon too.

I could've waited an hour to see if this will be the case in this instance, but have decided to stick my neck out on this one and risk looking like a fool.
  • #2,783
  • Apr 7, 2011 4:01am Apr 7, 2011 4:01am
Quoting bootsyjam
Was in EurCHF and EURUSD long thanks to divergence, bounce off Support levels and CCI trigger candle highs being breached.
There was no valid signal on EU yet.


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.
  • #2,784
  • Apr 7, 2011 4:29am Apr 7, 2011 4:29am
In post 19, Divergence talks about his 3 trade set ups.
On the chart example in this post, he uses a chart example of a divergence trade, with 1-2-3 areas mapped out, and the trigger bar entry.
Exact same set up on EURUSD this morning I believe?

It should be noted that I use stochs, not RSI, to view divergence as that is what I'm used to, so this may not have appeared on RSI indicator.
  • #2,785
  • Apr 7, 2011 4:40am Apr 7, 2011 4:40am
Quoting bootsyjam
In post 19, Divergence talks about his 3 trade set ups.
On the chart example in this post, he uses a chart example of a divergence trade, with 1-2-3 areas mapped out, and the trigger bar entry.
Exact same set up on EURUSD this morning I believe?

It should be noted that I use stochs, not RSI, to view divergence as that is what I'm used to, so this may not have appeared on RSI indicator.
There was divergence, and there was a 123, but no trigger.
And a very good example of why we use the trigger as if you had have taken the trade and held it you would now be stopped out with a loss.


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.
  • #2,786
  • Apr 7, 2011 4:41am Apr 7, 2011 4:41am
Quoting bootsyjam
In post 19, Divergence talks about his 3 trade set ups.
On the chart example in this post, he uses a chart example of a divergence trade, with 1-2-3 areas mapped out, and the trigger bar entry.
Exact same set up on EURUSD this morning I believe?

It should be noted that I use stochs, not RSI, to view divergence as that is what I'm used to, so this may not have appeared on RSI indicator.
To be valid the signal in divergense must be your set up bar 2 pips within of point 2 and the next candle must go up 1 pip(from the set up bar) to give you a valid signal.. In this case doesn't happened.. i hope that i help you ... Enjoy your trade ...!!
" Support/Resistance is your friend .. and TREND your girlfriend .. "
  • #2,787
  • Apr 7, 2011 4:46am Apr 7, 2011 4:46am
Correct shooter! (within 2.4 pips) here's a chart to illustrate..
Attached Image (click to enlarge)
Click to Enlarge Name: eu.gif Size: 27 KB
  • #2,788
  • Apr 7, 2011 4:59am Apr 7, 2011 4:59am
D4N,
Ok I think I see what you mean, in a divergence trade, the price has to go beyond point 2 (in your 1-2-3 example) by over 2 pips, and entry is not taken at the CCI trigger candle being breached.
Thanks for the advice, I hadn't got to the post where this was explained so will keep ploughing through.
Similar set up in GBCHF this morning, I entered at the break at the CCI candle trigger high rather than waiting for the break of area 2 in the 1-2-3 scenario but that worked out well, but will amend trading style.

No problem with the EURUSD trade, exited early for a few pips profit. I don't like holding short term positions after 9.30am London time as markets tend to lose volume, and as a result, price action fades.
Happened again this morning by the look of it, if that setup had happened at 8am London time I reckon it would have gone through the roof
  • #2,789
  • Apr 7, 2011 5:06am Apr 7, 2011 5:06am
Quoting bootsyjam
D4N,
Ok I think I see what you mean, in a divergence trade, the price has to go beyond point 2 (in your 1-2-3 example) by over 2 pips, and entry is not taken at the CCI trigger candle being breached.
you almost got it... here it is again for everyone.

For a long 123 trade....
We must see divergence (although Div himself will take 123's at the end of a trend without divergence)
We must see a 123
Setup bar must be higher than or within 2.4 pips of point 2 on the 123
Trigger is 1 pip above high of setup bar and must be triggered within the 2 candles after setup


and this is my new motto
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.
  • #2,790
  • Apr 7, 2011 5:12am Apr 7, 2011 5:12am
Quoting d4n
Correct shooter! (within 2.4 pips) here's a chart to illustrate..
d4n,
Is this a valid 123? Trigger has the arrow above it and its broken by 1 pip, two candles later. thanks
Attached Image (click to enlarge)
Click to Enlarge Name: s.gif Size: 19 KB
  • #2,791
  • Apr 7, 2011 5:16am Apr 7, 2011 5:16am
Quoting Toothman
d4n,
Is this a valid 123? Trigger has the arrow above it and its broken by 1 pip, two candles later. thanks
no... on my chart that bar was 3 pips away from my point 2 which was the peak before yours.... see the chart in post 2788
  • #2,792
  • Apr 7, 2011 5:20am Apr 7, 2011 5:20am
Quoting Toothman
Edit: Looking at it closer, I see trigger bar isn't higher than point 2.
It doesnt have to be higher.... it has to be within 2.4 pips or higher. so it can be 2.4 lower and be valid but if its 2.5 pips lower then no trade.


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.
  • #2,793
  • Apr 7, 2011 5:22am Apr 7, 2011 5:22am
All this talk of 123's and we've missed a perfectly good flag on EU!!

oh well... Ray gets all the pips again this morning, nice trading Ray!
Thats it for me till after the news.
  • #2,794
  • Apr 7, 2011 5:23am Apr 7, 2011 5:23am
Quoting d4n
It doesnt have to be higher.... it has to be within 2.4 pips or higher. so it can be 2.4 lower and be valid but if its 2.5 pips lower then no trade.


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.
thanks d4n,
I'm within a pip on my platform so the rules wouldn't have saved me on that one. I'm trading MT4 with MB Trading by the way.
  • #2,795
  • Apr 7, 2011 5:27am Apr 7, 2011 5:27am
Quoting Toothman
thanks d4n,
I'm within a pip on my platform so the rules wouldn't have saved me on that one. I'm trading MT4 with MB Trading by the way.
yes but your point 2 was in the wrong place... it should be on the peak earlier, so it looks like on your chart that it would have been more than 2.4 away?



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.
  • #2,796
  • Apr 7, 2011 5:40am Apr 7, 2011 5:40am
Quoting d4n
you almost got it... here it is again for everyone.

For a long 123 trade....
We must see divergence (although Div himself will take 123's at the end of a trend without divergence)
We must see a 123
Setup bar must be higher than or within 2.4 pips of point 2 on the 123
Trigger is 1 pip above high of setup bar and must be triggered within the 2 candles after setup


and this is my new motto
Read the rules over and over until you fully understand them..... and then read them some more!

[i][color=darkgreen]This...
You are correct D4n... Thats why i turn my account to demo... I believe to this system and i know that the key is practice ... Big thanks to the old members like you D4n for your support .. Enjoy your trade and make money......!!!! Practice is the key for success and i know this from my jop(professional shooter).
" Support/Resistance is your friend .. and TREND your girlfriend .. "
  • #2,797
  • Edited 5:54am Apr 7, 2011 5:42am | Edited 5:54am
Quoting d4n
Correct shooter! (within 2.4 pips) here's a chart to illustrate..
Hello, pls I would really appreciate an explanation.
In the chat room we didn't take that trade because point 3 went beyond point 1 ( and we didn't think that the 123 rule allows this), but we did take the next one.
We figured out that the point 3 on the chart was point 1 and the point 3 became the next little swing low.
We closed at -8.
The trigger bar in that case was within 2,4 pips.
Where were we wrong?
Many many thanks if you can answer. We had a long discussion on this in the chat room.

P.S. I see now your post 2792 referred to Toothman's chard on 2791, but our setup bar was 1 pip from the sma.
But most important thing I would like to know is if the point 3 is allowed to go past point 1
Many thanks :-)
  • #2,798
  • Apr 7, 2011 5:55am Apr 7, 2011 5:55am
Quoting Moonwen
Hello, pls I would really appreciate an explanation.
In the chat room we didn't take that trade because point 3 went beyond point 1 ( and we didn't think that the 123 rule allows this), but we did take the next one.
We figured out that the point 3 on the chart was point 1 and the point 3 became the next little swing low.
We closed at -8.
The trigger bar in that case was within 2,4 pips.
Where were we wrong?
Many many thanks if you can answer. We had a long discussion on this in the chat room.
Hi moonwen...
You are correct, if 3 goes below 1 in my book its not a 123 but on the chart i posted 1 and 3 are level.
  • #2,799
  • Apr 7, 2011 5:59am Apr 7, 2011 5:59am
Ok perfect, on our chart in the chat room it went below 0.7

Thanks!
  • #2,800
  • Apr 7, 2011 6:09am Apr 7, 2011 6:09am
Also people, dont concentrate all your efforts on 123's

This thread is called FLAG trading the trend... the flags are probably easier to trade than the 123's and there were a couple of possible winners this morning, one which Ray got and the other we missed.... plus if you master the flags first the 123's are easier to learn (123's are basically counter trend flags).



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.
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