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Flag trading the trend

  • #4,501
  • May 23, 2011 9:05am May 23, 2011 9:05am
Quoting Tailgun
btw, what is "DJ open"?
++++++++++++++

DJ-Dow Jones, US stock market opening
  • #4,502
  • May 23, 2011 9:12am May 23, 2011 9:12am
Quoting Tailgun
Oh yeah, I got burned. And to top it off I miscalculated lot size (it occasionally happens) and lost 4% instead of 3.
I am not so sure I call it "burned" when it completely goes up in flames. Burned would be more of, "ouch, that is hot and it hurts." I think what happened to me was more like taking gasoline and pouring it all over a bunch of dried up wood and then adding more gasoline and more gasoline and then dropping a match on it. Up in flames in a matter of seconds. Not just hot but scorching and gone.
  • #4,503
  • May 23, 2011 9:19am May 23, 2011 9:19am
Quoting Rcwso
I am not so sure I call it "burned" when it completely goes up in flames. Burned would be more of, "ouch, that is hot and it hurts." I think what happened to me was more like taking gasoline and pouring it all over a bunch of dried up wood and then adding more gasoline and more gasoline and then dropping a match on it. Up in flames in a matter of seconds. Not just hot but scorching and gone.
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It did look to me like a classic set up. Trend was down, LL & LH. The only thing that kept me out was the stocks opening just a minute or 2 after price dropped 1.3 pips (on my charts) below the sub.
  • #4,504
  • May 23, 2011 9:22am May 23, 2011 9:22am
Quoting diamonddbw
+++++++++++

It did look to me like a classic set up. Trend was down, LL & LH. The only thing that kept me out was the stocks opening just a minute or 2 after price dropped 1.3 pips (on my charts) below the sub.
Do you always stay out of a trade at the DJ open?
  • #4,505
  • May 23, 2011 9:27am May 23, 2011 9:27am
Only -37.8517 on CC reading on my FXDD platform, so no short setup.
  • #4,506
  • May 23, 2011 9:31am May 23, 2011 9:31am
Quoting Rcwso
Do you always stay out of a trade at the DJ open?
++++++++++++++++

Mostly yes. Monday mornings, definitely.

The EU long set up that worked about 1/2 hour ago, I thought was a lousy set up. But you could have made the full 17 or so pips on that one. Stocks were falling and price was approaching the most 5 min swing high which was also minor resistance from slightly earlier. Back to the books.
  • #4,507
  • May 23, 2011 9:34am May 23, 2011 9:34am
Quoting jmf0805
Only -37.8517 on CC reading on my FXDD platform, so no short setup.
What time was that bar at? the bar all of us are talking about is the 1325 GMT bar. Hard to believe yours was only -37 when the 1325 GMT bar was -145 for me. Should not be that much of a difference in the CCI.
  • #4,508
  • May 23, 2011 9:35am May 23, 2011 9:35am
Quoting diamonddbw
++++++++++++++++

Mostly yes. Monday mornings, definitely.
Something I will keep in my cross check for the future. Makes sense for Monday morning especially.
  • #4,509
  • May 23, 2011 9:44am May 23, 2011 9:44am
Here's one Type of que I like to use.
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  • #4,510
  • May 23, 2011 9:48am May 23, 2011 9:48am
not sure why you guys would be taking a short there, price failed to make a LL, then pullback--the only reason for going short would be a 123 to rejoin the trend, but the sub wasnt within 2.4 of the #2
  • #4,511
  • May 23, 2011 9:53am May 23, 2011 9:53am
Quoting tbjohnton
not sure why you guys would be taking a short there, price failed to make a LL, then pullback--the only reason for going short would be a 123 to rejoin the trend, but the sub wasnt within 2.4 of the #2
Good point. Bad analysis on my part in that case. Hindsight...
  • #4,512
  • May 23, 2011 9:59am May 23, 2011 9:59am
Quoting diamonddbw
Here's one Type of que I like to use.
Are you manually drawing those trend lines or using an indicator?
  • #4,513
  • May 23, 2011 10:01am May 23, 2011 10:01am
Quoting tbjohnton
not sure why you guys would be taking a short there, price failed to make a LL, then pullback--the only reason for going short would be a 123 to rejoin the trend, but the sub wasnt within 2.4 of the #2
++++++++++++++++++++

sub was beyond #2 so 2.4 rule does not apply here.
Attached Image
  • #4,514
  • May 23, 2011 10:04am May 23, 2011 10:04am
Quoting diamonddbw
++++++++++++++++++++

sub was beyond #2 so 2.4 rule does not apply here.
Can you explain what that means? In accordance with what Divergence has said and is written in the PDFs the SUB must be within 2.4 pips or completely go through point #2.

I am confused by what you have written.
  • #4,515
  • May 23, 2011 10:08am May 23, 2011 10:08am
Quoting Rcwso
Are you manually drawing those trend lines or using an indicator?
+++++++++++++++++++++++

Manually using MT4 trendline tool. Most of my trend lines follow the "Tom DeMark" method which is connecting most recent swing Low/High back to the previous swing, and then projecting the line forward. You can also draw a "Common Sense" trendline which you just follow the price highs or lows in the general direction of price action. Both are valid and help you find "Dynamic" S/R.
  • #4,516
  • May 23, 2011 10:11am May 23, 2011 10:11am
Quoting Rcwso
Can you explain what that means? In accordance with what Divergence has said and is written in the PDFs the SUB must be within 2.4 pips or completely go through point #2.

I am confused by what you have written.
+++++++++++++++

I'm confused too. Price was beyond #2. Isn't that what you just said?
  • #4,517
  • May 23, 2011 10:13am May 23, 2011 10:13am
Quoting Rcwso
Can you explain what that means? In accordance with what Divergence has said and is written in the PDFs the SUB must be within 2.4 pips or completely go through point #2.

I am confused by what you have written.
I think I have figured out what you meant. I did not read it properly the first time.

Yes, 2.4 does not apply if it goes through point #2. Got it.
  • #4,518
  • May 23, 2011 10:14am May 23, 2011 10:14am
that 123 you drew, was way too small for my liking, remember we're only looking for the "angelina jolie" trades. here is the 123 that i was referring to
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  • #4,519
  • May 23, 2011 10:17am May 23, 2011 10:17am
Quoting tbjohnton
that 123 you drew, was way too small for my liking, remember we're only looking for the "angelina jolie" trades. here is the 123 that i was referring to
Yes, that was the one I drew, after I zoomed back out and looked at the chart without staring at one or two bars.

I constantly need to remind myself to sit back and look at the whole chart and not just the GIANT bars on a zoomed in chart.

Lessons learned. Keep learning them. Someday they will be ingrained.
  • #4,520
  • May 23, 2011 10:21am May 23, 2011 10:21am
if price fails to make a LL or HH, that is a heads up for a potential trend change--look for a pattern to get into a counter-trend trade, and here, we were given a beautiful 123 for a worry-free long--maybe there should be a rule that flag trades are only valid when they come off of a LL/HH (the pullback from the last LL here, although extensive, produced a winner)
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