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Flag trading the trend

  • #5,021
  • Aug 18, 2011 1:15am Aug 18, 2011 1:15am
Quoting thefallguy
You are not setting your SL correctly, you need to review the 5min rules.

BTW at what time did you place that trade (GMT)?

It was around 16-16.30 GMT , I am not home so I cannot check it precisely but around that time. I entered again after this trade went out and when I came back the price had stalled at a few pips profit. Later today I can post a screenshot of that entry. Why is the SL set up incorrectly , shouldn't it be in this case the last swing high since that is the last level of resistance? And my TP would be the same distance just in the other direction, thus yielding a 1:1 risk reward ratio?
  • #5,022
  • Aug 18, 2011 2:20am Aug 18, 2011 2:20am
Quoting thefallguy
CCI 8 is to noisy? what are you using?
Could you elaborate on what settings and indicators you are using?
In this post, I reported the source of my knowledge to the fullest. http://www.forexfactory.com/showthre...49#post4848549
Eat granite science

Happy Trading
  • #5,023
  • Aug 19, 2011 2:54am Aug 19, 2011 2:54am
One Minute Flag :33 minutes after the London Open.

Hmmmm, Consistent and reliable as ever. A hugh thanks to the "Div" of the land.
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  • #5,024
  • Aug 19, 2011 7:35am Aug 19, 2011 7:35am
Quoting diamonddbw
One Minute Flag :33 minutes after the London Open.

Hmmmm, Consistent and reliable as ever. A hugh thanks to the "Div" of the land.

Hi Darryl,

Please don’t get me wrong, I am not suggesting that the 1 min system don’t work I am just stating that I can’t seem to filter out the bad trades.
I tend to over trade on the 1 min system. I will continue to test it though to try to grasp the nuances.

It nice to see that it is being traded successfully by others, nice trade!
  • #5,025
  • Aug 19, 2011 9:19am Aug 19, 2011 9:19am
Quoting thefallguy
Hi Darryl,

Please don’t get me wrong, I am not suggesting that the 1 min system don’t work I am just stating that I can’t seem to filter out the bad trades.
I tend to over trade on the 1 min system. I will continue to test it though to try to grasp the nuances.

It nice to see that it is being traded successfully by others, nice trade!
++++++++++++
Believe me when I tell you that I feel your pain.

I was just getting comfortable with the 5 min Flag, when it stopped working. The change to 1m was challenging. I also was over trading. Easy to do because of typical trader (human) emotions.

We are still in the summer trading period. This summer has been all messed up due to MAJOR adjustments in the world economic picture. We have gone from typical summer doldrums to Extreme Volatility, and back. Where we are at any point in time is very important to understand.

Here is what I look for now:
• I will only trade the first 3 hours of the US Session and the first 2 1/2 hours of the FF/London Session.
• Using the 1minute charts I only trade the Eur/Usd using the Flag methods. This is my opinion only. The E/J is totally unpredictable now. I feel the same regarding G/U. I used to watch these and a few others. I no longer consider other trades so I can get a much better understanding of the E/U.
• Using the 5m charts, I will look at the G/U & Eur/Chf now, but to this point I have only traded the E/U. I have seen trades I've missed on G/U, Eur/Chf. So What?
• If there is no momentum (momo in Divergence speak ) I will probably not take a set up.
• MOST IMPORTANT; If price has been going against the 15 minute trend and makes the first set up to return to the trend, I will NOT (Never) take this trade, even if there is a 123. I will ALWAYS WAIT for subsequent set ups. If it is the very next set up (2nd set up) I really like this one because it indicates to me more directional momentum movement. ALSO there will usually be a Larger 123 in the candle structure. I really like 123's but this is something that needs some getting used.
• Critical Levels. Not a good idea to trade into these levels:
- Daily Hi/Lows
- Pivots
- MA's 50, 100, 200 or your favorite, or none.

Please remember, all of this is solely MY OPINION! I do have more to say but need to go for now. Watch the charts and feel them move. Lock your impulses away before you open your charts. This will assist you FAR more than trading ANY plan.
Good Hunting,
Darryl
  • #5,026
  • Edited 3:14am Aug 20, 2011 3:00am | Edited 3:14am
The quality of the flag is all important imo.
The flag needs at least one touchpoint preferably in the middle.
Often to create a touchpoint, it inadvertantly gives a SUB & trigger. If there isn't a connection point before this, i wouldn't trade it.
I also wont trade a 1min flag unless it is between 20 and ideally 30 mins long and has a couple of touchpoints. It needs to be the correct angle and have a SUB that clearly crosses both the flagline and the CCI line simultaneously.
The SUB also needs to end at its extreme, or at least with a minimal wick/tail.
Generally i'm not interested if it has triggered the CCI but not ended crossing the flagline.
I also like to see a pullback from the trend, just before the SUB, as if it were an arrow being drawn back from a bow, before its release.
I actually find the DAX to be the most giving index.

http://i464.photobucket.com/albums/r...erfect1min.png
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #5,027
  • Aug 20, 2011 6:49am Aug 20, 2011 6:49am
http://savepic.org/2098623m.gif
Unfortunately I was at work and could not trade, very good signal for both profit and 1-1 to hold the position longer.

Happy Trading
  • #5,028
  • Aug 20, 2011 8:35am Aug 20, 2011 8:35am
Quoting The Cableguy
The quality of the flag is all important imo.
The flag needs at least one touchpoint preferably in the middle.
Often to create a touchpoint, it inadvertantly gives a SUB & trigger. If there isn't a connection point before this, i wouldn't trade it.
I also wont trade a 1min flag unless it is between 20 and ideally 30 mins long and has a couple of touchpoints. It needs to be the correct angle and have a SUB that clearly crosses both the flagline and the CCI line simultaneously.
The SUB also needs to end at its extreme, or at least with a minimal wick/tail.
Generally...
++++++++++++++++++++++++++++++++
What is a "Touchpoint"?
  • #5,029
  • Aug 20, 2011 8:45am Aug 20, 2011 8:45am
Quoting diamonddbw
One Minute Flag :33 minutes after the London Open.

Hmmmm, Consistent and reliable as ever. A hugh thanks to the "Div" of the land.

Nice trade!
  • #5,030
  • Aug 21, 2011 5:38am Aug 21, 2011 5:38am
Quoting diamonddbw
++++++++++++++++++++++++++++++++
What is a "Touchpoint"?
---------------------------

Diamond; 'touchpoint' as in; places the candles 'touch' the flagline, the more, the better the quality of the flag...
GoFundMe -stage-4-glioma-brain-cancer-fighter (link in my profile)
  • #5,031
  • Edited 7:24pm Aug 28, 2011 6:22pm | Edited 7:24pm
Price has not been trending very well. I did notice this Flag trade last Thursday, because there was quite a lot of momentum thrusting downward after the Buffet $5 billion B of A news had caused a long price spike, so I took a shot and it paid off. As most of you know, after price does a news spike, it will quite often return to where it was before the news (emotional) spike.

There is not much activity on this thread now but still valuable info on very high probability one and five minute set ups. This is not the only thing I trade but it is one I can consistently count on to be successful. I occasionally experience a loss. Not often enough to forget about all I've learned here.

I understand the Div has been back in the lab conjuring up new and exciting 5m trades. I wish him more success and once again send him a high five with my thanks.
Darryl
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  • #5,032
  • Aug 28, 2011 9:27pm Aug 28, 2011 9:27pm
I agree with Darryl. In fact, flag trading is the only viable daytrading strategy I've found in the past two years learning forex and I intend to stick with it for the long haul. I eventually came around to the 1m/15m variant after being frustrated with it initially. Now I chart 2 pairs, EU and AU, across 1m/5m/15m TFs for flag trades. The trick is discipline, only taking those trades which conform to the rules.

Like Darryl, I too have another strategy I trade (a larger TF strategy off the Daily charts). But flag trading is the best I've found for daytrading and still recommend it it to others, even if Div has gone on to other things.

To the point about price not trending well recently, I have been making this point with my trading partners for the past few months now. If one checks the Daily chart for EU you'll find price has been essentially ranging since the end of May. This is partly the summer doldrums, made even more indecisive by recent political events in both the US and the Eurozone.

But if you check that Daily chart you'll find we are soon coming to a tipping point where a breakout appears close. A pair trending solidly on the larger TFs with healthy daily ranges is most conducive to flag trading. We haven't had that for some time but I feel we are about to turn the corner.

Here's the chart to illustrate my point.

http://i228.photobucket.com/albums/e...sgottagive.gif
  • #5,033
  • Aug 28, 2011 10:36pm Aug 28, 2011 10:36pm
Quoting Tailgun
I agree with Darryl. In fact, flag trading is the only viable daytrading strategy I've found in the past two years learning forex and I intend to stick with it for the long haul. I eventually came around to the 1m/15m variant after being frustrated with it initially. Now I chart 2 pairs, EU and AU, across 1m/5m/15m TFs for flag trades. The trick is discipline, only taking those trades which conform to the rules.

Like Darryl, I too have another strategy I trade (a larger TF strategy off the Daily charts). But flag trading is the best I've found...
+++++++++++++
Interesting that you mention the aud/usd as a pair you like to trade. What I've observed is that the aussie & the euro, seem to be the best trending pairs today. In some respects I prefer the aussie because it tends to move almost anytime of any trading session and in between as well.

Thanks for the heads up on your success with the 15m. I've never really studied that TF. What are your limits in respect to what is the biggest stop/profit target you will attempt?
Thanks,
D
  • #5,034
  • Aug 29, 2011 11:05am Aug 29, 2011 11:05am
Quoting diamonddbw
+++++++++++++
Interesting that you mention the aud/usd as a pair you like to trade. What I've observed is that the aussie & the euro, seem to be the best trending pairs today. In some respects I prefer the aussie because it tends to move almost anytime of any trading session and in between as well.

Thanks for the heads up on your success with the 15m. I've never really studied that TF. What are your limits in respect to what is the biggest stop/profit target you will attempt?
Thanks,
D
Actually, when I mentioned the 15m chart in my post it's in reference to using that TF as our trend direction for choosing trades on the 1m and 5m charts. During the limited time we trade flags (at least those of us who only trade the London/NY overlap) it is very rare to catch a good flag SUB on the 15m charts (although it does happen occasionally and when it does I use the 5m rules, taking the size of the SUB as the trade size, disregarding any trades that would be greater than 15-20 pips).
  • #5,035
  • Aug 30, 2011 3:41am Aug 30, 2011 3:41am
With apologies to Mr Soprano (only kidding, div...), to whom I am as always extremely grateful, here is a trade using this entry method that I put on this morning.

The blue-ish ma is the 10 sma to which I added 2.4 pip dotted bands (High + 2.4 above, Low - 2.4 below). The red ema is an 89 period ema I am using for trend direction (rather than referring to the M15 chart). Again, apologies for the non-conformity, but it works for me, fitting in well to my other trading.

Thank-you very much D for your very generous sharing.

Attached Image (click to enlarge)
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  • #5,036
  • Aug 30, 2011 11:45am Aug 30, 2011 11:45am
I haven't been trading much lately, because not much trending...I use the flag and 123 almost exclusively...Loving this method...Thanks Div...Waiting for the summer doldrums to be over, so maybe things will get back to the way they were...(making money consistently)Special thanks to you Daryll for your recent post on filtering...It has stopped me from taking a lot of losers...my win rate is up now, just not having a lot of them....Wonder how Div made out last month..He was looking for 16 winners, would like to know if that worked out for him...
  • #5,037
  • Aug 31, 2011 5:03am Aug 31, 2011 5:03am
Took GU as weaker than EU this morning (based on % move down from Open) - only looking at these two pairs.

No news around this time (chart times are CET), but very choppy price movement, missed first entry fill, then filled on next bar; exits also filled badly, unusual with TradeStation these days. 'Thought price might really break down at support, but suddenly bounced up strongly... oh, well, a few pips from a tricky morning; thanks, D.
Attached Image (click to enlarge)
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  • #5,038
  • Aug 31, 2011 10:41am Aug 31, 2011 10:41am
Quoting jtrade
Took GU as weaker than EU this morning (based on % move down from Open) - only looking at these two pairs.

No news around this time (chart times are CET), but very choppy price movement, missed first entry fill, then filled on next bar; exits also filled badly, unusual with TradeStation these days. 'Thought price might really break down at support, but suddenly bounced up strongly... oh, well, a few pips from a tricky morning; thanks, D.
+++++++++++++++

Sorry JT. I can't follow your chart. This was a long, or 2 trades?
  • #5,039
  • Aug 31, 2011 11:00am Aug 31, 2011 11:00am
NP, Darryl : I usually trade in 2 (occasionally 3) lots, so I entered short $100k on the bar marked with the vertical red line, exit 1 $50k @ +12, exit 2 @ +16. Of course, I'm aiming to hold the second lot for much larger returns where possible.

I'm not saying this way is better than Div's "all in, all out" - it may well be inferior, but it suits me for now.

HTH.

J.
  • #5,040
  • Aug 31, 2011 2:58pm Aug 31, 2011 2:58pm
Quoting jtrade
NP, Darryl : I usually trade in 2 (occasionally 3) lots, so I entered short $100k on the bar marked with the vertical red line, exit 1 $50k @ +12, exit 2 @ +16. Of course, I'm aiming to hold the second lot for much larger returns where possible.

I'm not saying this way is better than Div's "all in, all out" - it may well be inferior, but it suits me for now.

HTH.

J.
+++++++++++++

I see it now. Good Catch. I'm in US so I was "At one with... my pillow" and wasn't able to take advantage of this trade.
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