Flag trading the trend

This is from Price Accordingly thread. It calculates entry from setup candle H/L instead of from 10 MA. If someone could change the code to use 10 MA to get entry price. I don't know how it will effect accuracy changing to 2.4 pips from candle instead of from MA. Just might save some time having it printed on screen. It does add spread on buys.

Also, instead of having three CCIs wouldn't it be the same to have three MAs 10 (for M1) 50 (for M5) and 150 (for M15) With 150 MA 200 MA could go away.

Just my tw0 pips. Paul

Thanks jtrade for the compliments and yep I am very eager to learn from others and share my thoughts too.

I know where you are coming from regards the HAs but I find them so much easier to read at a glance as to whats going on with the price action especially when its moving smoothly.

That being said I do flit between the 2 when about to enter or thinking of closing early as real candles give a much better feel to the immediate price action right at the nose of the price.

Love this thread everyones so helpful and accomodating, its great.

Whilst I'm here can I ask a general question regarding times to trade?

Is it best to let the noise of the actual open subside and start trading say 30 mins after the opens so 8.30 London and 13.30 New York?

Or would you recommend starting just before the opening times?

Any thoughts?

Many thanks

I'd say it changes : a couple of years back the best time to be at your desk was for the Frankfurt Open at 0800 CET(0700 UK), which I found very frustrating as I don't get back from the school run till just before 0900 local/CET, when moves were often well underway. Then it shifted, Frankfurt Open becoming very tricky, London definitely the best start time (& I mean both these periods were clearly superior to trading the US session).

But this year it's shifted again, the first moves of the day often not happening till very late in the UK morning / very early US or later. So you could say it's the Yanks turn (sorry, shouldn't refer to them as Yanks...) - I rarely trade the US morning session, but from next week I will have Monday & Thursdays for both London & NY Opens.

With this method, it's less of a concern, as the targets are so small, but the more movement, the more opportunity.

I know traders who get up at all sorts of odd hours to trade what they feel is the best session, and this way of living seems to suit them (even if it means getting up at 01:00 ). Personally, I like to trade in the mornings & that's what I do,adjusting my approach to the conditions. The great Ed Seykota once said that markets are always the same, because they are always changing. Perceptive fellow, that Mr Seykota...

The great Ed Seykota once said that markets are always the same, because they are always changing. Perceptive fellow, that Mr Seykota...[/quote]

Thats a great quote! One of my all time favourite quotes which i throw at any "winy whingers" I hear complaining about how things keep changing! Is:

"There's only one sure thing in life, that nothing stays the same!"

Don't know who said that but don't you just love it?

Well bit of a lull between London and New York open so here's a question for all you experienced flag traders.

When we have a pullback taking place like the one below, which has already produced 2 SUBs, how do you decide which sub to take?

Obviously we want to take the "high probability" SUB every time, but how can we do that?

I know this is not the right time being between opens but assuming it was, how would you choose the right sub to trade?

For me I would wait for my 3 CCIs to confirm a deep pullback which would be great if it coincided with the price hitting the 200 ema or the last LH at 1.3818 if it kept going past there I would look at the 5 min LHs or the whole number 1.3850 or last but best the last 15 min LL at 1.3870.

A qualifying SUB triggered at any of these resistance levels after my 3 CCIs confirm a deep pullback, would be my choice.

Actually now I think about, maybe the better question to ask is how do you decide which SUBs not to take?

Anyone else got any method they would like to share and perhaps an indication of how reliable it is?

Lets keep the flags flying!

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Please save your money and avoid trading off hours.

The basic rule is after a retrace from trend, enter on 2nd set up following return to trend. If you try this off hours, your chances are stifled.

Did anyone get the trade today (Friday) 20 minutes after the NY open? You could have got it on both the 1m & 5m. The one minute would have got you in 2 pips higher. I missed this trade by about a minute and it's Clives fault because I was checking out his revisions. Please forward your address to me so I can send you a bill for lost revenue!

lol

This was one beautiful double trade.

First the 1m Flag was almost perfect and it was followed immediately by a 5m Trend Line Break. Good for 15 on the Flag and 10 on the Trend Line Break.

I've been looking at trend lines all weekend and it paid off immediately.

Sorry about the extra MA's on the chart. I use them for higher time frames to further emphasize trend.

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BTW, You can see a 1m Flag trade on the extreme left side of the chart also (17 minutes past the FF Open). The trades are still there.

"The Truth is Out There.." ~ X Files

I am still trying to grasp the 1 min entries if anyone could comment on why this trade should not have been taken it would be helpful. I could think of a few reasons not to have taken the trade but I couldn't stop myself the setup look to pretty.

What would be the reasons NOT to take this trade:

- The pull back was not deep enough or long enough? But there were a few pull backs before this one so it is not the first pull back.
- 15 min & 5 min charts where both moving in the right direction (price was trending)
- The SUB was 2.3 pips away from the 10ma ( a little far from the MA but still within the rules)

Here's my 3rd 1m Flag today. Hope someone else is getting this.

From what I understand, that's not a qualified entry, because your stop is not below last swing low.

Thing this rule can never be violated.

Trying to tune up the entry's myself too.

Regards
PH

My god! U rulle diamond!

I'm looking for longs today from what I see in 15 minutes chart... and u are shorting!!

Respect
PH

Hi Darryl,

Isn’t the 15 min trend up and if so should we not be looking for longs?
What is your Criteria for taking shorts?
Attachment

Thanks phneutral, your 100% right, thanks for the reminder.

Good trading, Darryl : very well done.

Are your Vimeo vids still up & if so may I please watch them ?

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Sorry it took so long to answer. The bridge was out... or some such baloney.

My answer is on the long side, so get comfy.

• The deal with understanding the flag trade is about 25% technical and 75% interpretive. This bears repeating; The deal with understanding the flag trade is about 25% technical and 75% interpretive. There are no trading robots that perform day in and day out. There are no methods that provide technical set ups that can be blindly followed. You, the trader, are required to understand market timing and times.

• It is critical that you get this, really really get this. The only way to fully understand forex is to spend thousands of hours of face time with the charts. Malcolm Gladwell wrote a book called Outliers, in which he states that 10,000 hours of working with anything, is the minimum amount of time required to become an expert. This comment is not intended to be hurtful, or point fingers, but to give all who take the time to read this, a heads up as to the fact that this stuff takes HUGH amounts of time and dedication.

• Not to mention all of the questioning from "Well meaning" family and friends regarding your sanity for spending your life with these "Stupid" colored charts. More than one friend has told me that it's nice that I have a hobby, but... you don't really believe that you can actually make money doing this do you??? These are the type of statements that can make you doubt yourself. I just had to keep asking myself, who am I going to believe, someone that knows nothing about trading or myself.

And now we return to the regularly scheduled question:
• 1st off, regarding direction, the euro has been falling off of a cliff for days. Market sentiment is short euro. I was watching what I thought to be a critical level, 1.3684. For me this was and area of potential change.

• That being said, should price reach this area, then (in my mind) I would be out of the market until such a time that 1.3684ish had been significantly breached and retested. By significant, I mean at least 30-40 pips.

• Had this taken place, I would have entertained the thought of a potential change in direction, but not today, because about 2 hours after the NY open, London bank traders begin closing out their positions. As a result, the market can appear to have changed direction. I never take these moves too seriously unless they are hugh. And even then I strive to understand what prompted the hugh move during this time of the day. i.e., Did Mr. Buffet just spend $5 billion on Chucky Cheese Pizza Parlors, or something of that nature.

• OK, let's say price had breached the 1.3684 area by a significant bunch of pips, retested this area and headed up. Now I watch price action very carefully. If price begins making good flags on it's way up (with proper sub's and making price targets on these sub's) I then could possibly be convinced of a change in direction. But still would not be taking these trades because of the late hour as I explained above.

• The trade you did take was also about the 4th wave, or so, in that move. In this situation the market is probably running low on fuel for this move. Some would site eliott wave. I'm not clever enough to do that. I do know that no moves last forever (except for maybe the yuan) so by this time I'd be in the kitchen making coffee, or bloody mary's or what ever it is I do during market lulls.

The 5 Main Rules for being Successful Trading the Flag:
1. You have to feel the momentum
2. You have to feel the momentum
3. You have to feel the momentum
4. Trade only during first 2 1/2 to 3 hours of FF/London & NY. Never start looking for trades outside of that time period. There may be set ups during off hours, but quite often no follow through due to lower market participation.
5. Never take the 1st flag when price has gone against the trend. The 2nd flag is the key.

Begin watching price action, current and past, on trending moves. Here's the pattern:
• Price will change direction and make a small flag (retrace) before resuming direction of trend.
• Once small flag is confirmed, price will make a 2nd, more prominient flag. This one is almost always the best bet.
• Follow the entry, stop & limit guidelines and bring home the bacon.

Anyone still awake???
Darryl

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Tried to PM you but your account is not set up to recieve PM's.

Hi JT. Yes the videos are still up. You will need a free vimeo account, www.vimeo.com Once you have that send me a message via vimeo or pm me your vimeo email sign up and I will add you to the contact list. Currently about 10 hours worth of videos. The newer ones are better.

Here's the video link: http://vimeo.com/diamonddbw/videos
Darryl

Thank-you, Vimeo message sent.

First trade of my morning using the futures (I primarily trade futures).

Just testing an indi that automatically draws S&R, so please excuse & ignore, as well as the two longer emas for trend.

Edit : I'm enjoying listening to Div's dulcet tones on Darryl's videos - thank-you, gentlemen - but I've succceeded in confusing myself as to the proposed "final" stop / target setting : I thought it was using the SUB +1 + spread for both target and stop, but now I think it's simply a 15 pip stop & target ... it doesn't really matter, actually, but I'm just sayin...

At minute :46, after the London Open another 1 minute flag. The Hits keep coming...