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Flag trading the trend

  • #5,081
  • Sep 13, 2011 1:59am Sep 13, 2011 1:59am
Just had a looser.

Can you tell me where's the mistake?

Thanks!
PH
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  • #5,082
  • Edited 2:34am Sep 13, 2011 2:18am | Edited 2:34am
Your trade was better than mine, Darryl - no heat (my entry was 8 minutes before yours & also marginal on the 2.4p rule).

@phneutral : can you give me your exact trade time to comment, please ? Does your platform not allow a simple histogram for the CCI ? Edit : I think it's the 10.40 CET bar on which you entered (0940 UK), in which case the one negative indication is that the 10 SMA hasn't really rolled over yet, so perhaps better to wait until you're sure the pullback, which was quite strong, is over. Remember, a 100% win rate is not to be expected ...
  • #5,083
  • Edited 2:57am Sep 13, 2011 2:36am | Edited 2:57am
9:40 London time.

Ohh! SMA should be pointing down too? Ok then!

Thanks!

Quoting jtrade
Your trade was better than mine, Darryl - no heat (my entry was 8 minutes before yours & also marginal on the 2.4p rule).

@phneutral : can you give me your exact trade time to comment, please ? Does your platform not allow a simple histogram for the CCI ? Edit : I think it's the 10.40 CET bar on which you entered (0940 UK), in which case the one negative indication is that the 10 SMA hasn't really rolled over yet, so perhaps better to wait until you're sure the pullback, which was quite strong, is over. Remember, a 100% win rate is not to be...
  • #5,084
  • Sep 13, 2011 3:22am Sep 13, 2011 3:22am
But, where is the flag???! The sub must be a definite bar decisively crossing the flagline simultaneously with the CCI crossing the +50/-50 and the flagline should have touchpoints...

http://i464.photobucket.com/albums/r...erfect1min.png
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  • #5,085
  • Sep 13, 2011 4:17am Sep 13, 2011 4:17am
My mistake perhaps - I thought Divergence only specified the crossing of the SMA. Thanks for the chart.

ph : I don't think slope of the SMA is a prerequisite, rather more of a hint.
  • #5,086
  • Sep 13, 2011 7:56am Sep 13, 2011 7:56am
Thank you all for the reply's.

Still one doubt: the 2.4 pip rulle! Can u detail it a little more?

Is the close of the SUB that can't be more than 2.4 pips away from the MA?

Regards
PH
  • #5,087
  • Sep 13, 2011 8:02am Sep 13, 2011 8:02am
Quoting phneutral
Thank you all for the reply's.

Still one doubt: the 2.4 pip rulle! Can u detail it a little more?

Is the close of the SUB that can't be more than 2.4 pips away from the MA?

Regards
PH


This is how I understand it:

If you are taking a long trade the low of the bar (SUB) can not be more then 2.4 from the MA
If you are taking a short trade the high of the bar (SUB) can not be more then 2.4 pips from the MA
  • #5,088
  • Sep 13, 2011 11:50am Sep 13, 2011 11:50am
Quoting thefallguy
This is how I understand it:

If you are taking a long trade the low of the bar (SUB) can not be more then 2.4 from the MA
If you are taking a short trade the high of the bar (SUB) can not be more then 2.4 pips from the MA
++++++++++++++++++++++++++++++++
Hi FG. Yes, your take on the 2.4 pip rule is correct. SUB must have touched the 10 MA or be no further than 2.4 pips as you wrote.
  • #5,089
  • Edited 12:08pm Sep 13, 2011 11:59am | Edited 12:08pm
Quoting jtrade
My mistake perhaps - I thought Divergence only specified the crossing of the SMA. Thanks for the chart.

ph : I don't think slope of the SMA is a prerequisite, rather more of a hint.
+++++++++++++++++++++++++++++++++
Correct JT. The SMA slope is usually hooking up or down, but is not necessary. All that is necessary is a break in the + or -50 reading.
  • #5,090
  • Sep 13, 2011 1:12pm Sep 13, 2011 1:12pm
Quoting The Cableguy
But, where is the flag???! The sub must be a definite bar decisively crossing the flagline simultaneously with the CCI crossing the +50/-50 and the flagline should have touchpoints...

http://i464.photobucket.com/albums/r...erfect1min.png
++++++++++++++++++++++++++++++++
Hi CG. I'm not doubting that you're sold on the touchpoint analysis, however I've had successful trades without the touchpoint. I've never heard Divergence speak of this either. By all means if you have a definition for a touchpoint that I'm not understanding, I'd like to hear about it.

What I'm seeing on your chart is an example of a trend line break, in which the set up is very good. However I only use trend line trades on 5m and above. I have numerous examples of trend line breaks if you'd like to see what I'm talking about.
Darryl
  • #5,091
  • Sep 14, 2011 12:19am Sep 14, 2011 12:19am
'Morning, everybody. EU chart not looking so tradeable yet, so switched to GU, showing a clear downtrend. @ 15:15 the stop was bigger than needed and target was 1 tick below the low, so I made it 13:13.

Bingo
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  • #5,092
  • Edited 1:47am Sep 14, 2011 1:25am | Edited 1:47am
Just something i've noticed. This is 'flag trading' after all... therefore; you need to be able to draw a quality flag. Yes, i too have taken many good trades without so called 'touchpoints', however, without them i have also seen many fail!
I find there are too many valid triggers, which immediately fail as they were just part and parcel of setting up a larger flag. I'm only interested in the ones which connect and make a decent line at the right angle and then later a SUB which decisively breaks that line.
Another interesting observation about this, is that; I also noted that it is a great indicator of a topping/bottoming process. Often a SUB wont get triggered but creates a point to connect a line up to draw your flagline, shortly after, another SUB does the same, it makes you erase your first line and re-draw a fresh line. This is when to realise its telling you, no set-up is coming and in fact PA is about to reverse...
Its not quite the same as a 2B, therefore another valuable tool to have in your arsenal!

If thats all sounded too confusing, i can try to find a chart to help show what i mean...

*EDIT*

There is even a case for a third line to have been drawn in the following chart, but adding it would have made it messy and more difficult to interpret. If you compare to my 'perfect' flag in the last post, its quite some difference, the main one being the SUB. If you are in doubt, stay out!

http://i464.photobucket.com/albums/r...2Breversal.png
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  • #5,093
  • Sep 14, 2011 3:33am Sep 14, 2011 3:33am
http://i464.photobucket.com/albums/r...2/touching.png

It also looks like there is another flag in the making right now, so best i go check it out!!!
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  • #5,094
  • Sep 14, 2011 3:44am Sep 14, 2011 3:44am
Quoting The Cableguy
http://i464.photobucket.com/albums/r...2/touching.png

It also looks like there is another flag in the making right now, so best i go check it out!!!
Thanks for your charts cableguy!. They are truly illustrative.

Took both those flags, the one in the chart and the next one too.

Still, I'm loosing 3 - 2 for the day, since I was shorting before...

I will try to post my looser's.

Regards
PH
  • #5,095
  • Sep 14, 2011 3:45am Sep 14, 2011 3:45am
Well, that will teach me to keep my eye on the ball instead of trying to be educational! I missed it! Sure enough, another nice set-up, with a late touchpoint and obvious SUB, no 'heat' whatsoever and target hit within 2 minutes.
I hope you guys are getting these?!

http://i464.photobucket.com/albums/r.../touching2.png
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  • #5,096
  • Sep 14, 2011 3:58am Sep 14, 2011 3:58am
Hi!

http://savepic.org/2323895m.gif

trade counter trend. risk in the two transactions did not exceed 30 pips, output 1:5
Happy Trading
  • #5,097
  • Sep 14, 2011 4:00am Sep 14, 2011 4:00am
Being an "Elliotist" we can also smell the inversion with a confirmed breakdown of those lines.

I think that i don't wanna be in a trade that doesn't show an abc consolidation/correction before.

Regards
PH
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  • #5,098
  • Sep 14, 2011 4:02am Sep 14, 2011 4:02am
Thanks PH,

I used to take anything and everything, that i thought looked even remotely like a flag. I have to say i have relaxed about it all completely nowadays and look for only what i feel are 'deadcerts', it has transformed it for me, if im honest. I find failed 1 min set-ups often lead to a touchpoint within a 5min flagline and failed 2/5 min set-ups going to create a 15 min flagline.

I'm not sure if anyone has noticed, but usually 15 min set-ups often dictate the TP. If you add the distance of your stop (being one pip above/below the high/low of the flag), to the entry point it often gives your TP. Hold on i will dig out a chart....

*EDIT*

This was from a few weeks ago, but shows what i mean, TP hit to perfection...

http://i464.photobucket.com/albums/r.../chfjpy4RS.png

And again, here's another from last week... Remember to keep switching time frames. Set-ups happen on them all. If your not confident enough to place a heavy stake but prefer to go for more points instead to make your money, the 15min is a must... Set-ups often giving in excess of 100 points...

http://i464.photobucket.com/albums/r...2/dax15min.png
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  • #5,099
  • Sep 14, 2011 4:15am Sep 14, 2011 4:15am
Remember the first set-ups we used to look for on the 5min system.
Look for the last HL to be taken out (short) or vica versa, look for an immediate retrace to form a flag? It was basically gaurantee'd points. Well all you have to do is look for them on the 1 or 2 min charts instead...

Here's a couple of examples to jog your memories!

http://i464.photobucket.com/albums/r...rk72/flag2.png

and again...

http://i464.photobucket.com/albums/r...72/daxfib3.png
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  • #5,100
  • Edited 5:15am Sep 14, 2011 4:44am | Edited 5:15am
I know i'm taking over the thread for this morning! but guys, check out the German Dax. It throws up many set-ups and proves very reliable. I take more set-ups from this then i do from the EurUsd. Even though the points value of the index is less than half that of the eur, it still adhere's to all the same rules. Only thing is it has to be traded during European hours.

A nice one this morning, as easy as they come...

http://i464.photobucket.com/albums/r.../touching3.png

And just after posting the above, switch back to lower time scales and again, another set-up in the making...

http://i464.photobucket.com/albums/r.../touching4.png
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