Flag trading the trend

zlr+tl braek

Darryl, if i may... This falls into my different minute rules... its not long enough (imho) for a 5min flag, switch back to the 2min, (being an hour in the making); and its a clear 15point winner, stop either 15points or a pip above SUB in this case...

http://i464.photobucket.com/albums/r...k72/2mndar.png

Here's a very pronounced 123, for 25 points, (without being too greedy), remember such pullbacks are often just that, (30/40 points) and not necessarily a full trend reversal (without huge divergence on a larger timescale), so if no HH is printed, lookout for a reverse 123 to get us back into trend...

http://i464.photobucket.com/albums/r...rk72/123pp.png

Further to Darryl's post about life outside the 1/2/5min charts...

I often trade the 15min and notice how it very often dictates where the TP will goto, by subtracting what should be your stop point, from the entry. Aim for say 10 points less to be safe and more often than not, they achieve target.
The chart says it easier than i can explain!

Here's a great 1hr set-up; you will note the timescale of 2 days in the making and remember what i said about drawing the arrow back from the bow before release? This is why i like a 'touchpoint' toward the end of the flagline as a giveaway that it is about to pullback from the line before reversing to give a strong SUB!

Just one other thing to note was the coinciding gap fill from Sunday night's open...

http://i464.photobucket.com/albums/rr10/klark72/1hr.png

Set-ups coming thick and fast again today...

Used the 1min to show the last flag trade, but 123's look better on the 2min;

http://i464.photobucket.com/albums/r...k72/123pp2.png

Don't forget to keep an eye on the 30min/hourly now to see if it breaks the line to coincide with CCI...

My chart becomes more minimal...

What does the CCI actually show us ?

It shows the relationship between price and the SMA, no more, no less. So if you put an SMA (8) on your chart, you will see that a CCI (8) crosses its zeroline every time price crosses the SMA (think about that, Woodie fans). So it's just a graphical description I have decided to drop, along with coloured bars (well, slight difference between my up & down bars).

Have good weekends, everybody.

CG - are you not using a directional filter (I'm keeping an eye on M5 / 15 / 60 as well as having the 89 EMA on my M1 chart) for these 123 reversals ? I understand you do watch higher timeframes as you have described, but you seem to be trading "FreeFlow" today (which is good if you can do it).

And what's the deal with the BBs !?

http://i464.photobucket.com/albums/r...2/1hrlater.png


JT, no filters; i try to keep things as simple as possible and like to record my thoughts and trades, hence lots of charts... I've been doing so on my own thread on ADVFN for some time now, but just felt that if any of my own experiences can give a little bit of insight to others than perhaps i should replicate them here, as i said before, if anyone gets fed up with them, i would stop as i feel its Mr.D's thread after all... I'm only adding my own perceptions to this system!!! I do see a lot of people making the same mistakes i was in the early stages. Its only the last few weeks i appear to be able to stay away from the wrong trades, or at least ditch them quickly if i don't feel its looking right...
It does come down to sheer experience at the end of the day.
BB's; yeh should delete them really, i don't actually rely on them for this style trading!

'Looks like a no-trade according to D's rules : stop not above prior swing high. If it had been, the trade might have reached b/e + 1 after the second swing down (can't read chart clearly).

++++++++++++++++++++++++++++++++

Probably there will be many naysayers regarding what I am about to report.

Daily Charts Flag trades Results From February of this year:
• Nzd/Usd 11 W // 1 L // 5 BE
• Aud/Usd 13 W // 5 L // 1 BE
• Eur/Usd 7 W // 2 L // 6 BE
• Gbp/Aud 14 W // 4 L // 2 BE
• Eur/Gbp 17 W // 2 L // 1 BE
• Eur/Aud 11 W // 6 L
Cumulative Totals - 73 W - 14 L -15 BE

Only 6 of these are live from the Thursday Sept 22 London Session. All winners on all six pair shown above. The remainder are back test results.

I used Oanda MT4 demo charts for the testing. Their daily candle updates 3 hours prior to London Open. Check your charts for daily candle closing times. If some of you would like to test this yourself using other candle closing times, I would be anxious to hear about your results.

I have not yet refined any rules. My testing was based on this simple set of basic guidelines:
• I'm watching for new a + or -50 candle, just like on the 1 or 5 min Flag set up.
• Once the daily close has occurred, on this candle, I wait for the new days candle to pass the Set Up Day (Same as Set Up Bar, SUB) by 11 pips, and then enter.
• My stop and target is based "Roughly" on 50% of the SUB High to Low. i.e.; if the sub total hi/lo is 100, then my stop/target would be 50.
• Once price has achieved 1/2 of the target price, I then move my stop to BE + 10. The + figure is also somewhat discretionary based on the sub total range. i.e.; if the daily range was only 60, and my target was 30, and price advanced 15 pips beyond my entry, then by moving my SL to +10 I would only be 5 pips from the current price. Your choice of a BE move would be up to you.

That's basically it!

Some of the things that you should now be asking is;
• If my target is 50% of sub and my SL is also 50%, and my entry is 11 pips beyond the sub's hi/lo then where exactly is my SL & Target?

My simple answer to this is; Sorry Dude. This part is discretionary and is totally up to you.
My suggestion, and what my results are based on, is this;
• My actual targets were marginally shy of the "True 50%" of the sub range, applied to the Trigger bar Target.
• My stops were actually about the same distance back from entry.
--- So if SUB hi was x.x100, and entry was x.x111, then SL would be approx. x.x075

Question: When do I move my stops to BE +?; Answer: at 1/2 of distance from entry to target.

The basics, listed above, should be balanced based on realtime chart action and important levels. This might mean having a slightly different target or SL, or entry. It might also mean taking some profits earlier and/or letting some to the trade run. A perfect example of this is the gbp/aud for Sept 22nd. I did let a small part of the trade go beyond my original target for these 2 reasons:
• Price had some serious momentum
• This pair is known for big moves.

I did chicken out only slightly beyond my original target. I think price continued another 100 pips or so.

All of this was one days worth of research. I only verified some results by going down to the hourly charts to see price progression, to determine if there was any question of "Had Price Hit SL Before Advancing to Target". In most cases it was obvious that the stop did not come into jeopardy.

I invite everyone reading this to conduct your own testing to determine the results.

Happy Hunting,
Darryl

p.s. These are results of only 2 of the trades I took. The other 2 were the Aud/Usd +100 & Eur/Usd +5. The euro was annoying me by hanging in a 25 pip range while my other trades were putting up big numbers. So I bailed on this trade. Of course you all know what happens then. Within 10 minutes the EU took off and made the original target, with me back at the starting gate with egg on my face.

Very interesting info, Darryl : thank-you very much for sharing.

J.

Last weeks post...

http://i464.photobucket.com/albums/r...2/1hrlater.png

Then the market created an opposite case scenario...
Here's a post i made elsewhere on Friday night...

-----------------------------------------------

and then - 23 Sep'11 - 21:25 - 417 of 419 edit

Mind is scrambled right now, so prob do more research tomorrow, but i am torn between two scenarios on the Yuro right now...

Firstly i have the 1hr chart showing a typical bottoming process...
Whenever you can draw a first line (the steeper line on the chart) it usually breaks to give points, but not the full usual target amount, it often reverses to create a further 'touchpoint' within a larger flag. However, sometimes these larger flags break but don't go on to see a LL printed, or if they do, it becomes a 2B reversal...

http://i464.photobucket.com/albums/r...72/1hrnorm.png

and here's what i meant...

http://i464.photobucket.com/albums/r...k72/2brev7.png

Don't forget to draw your Fib lines in to give you your reversal or resistance points... Take the high at the start of the drop (100%) and use the tool to match the bottom to (0%)... the 61.8% retrace will always be a likely stumbling block...

http://i464.photobucket.com/albums/r...rk72/fibs4.png

So whilst having this info, you can exit this 2min flag at that point regardless if you managed the 15 point target or not!!!!

http://i464.photobucket.com/albums/r...rk72/2min2.png

keep an eye on all time scales, trend still up, 5min this time...
Again, touchpoint near the end and consequently, a nice Sub breaking the line simultaneously with the CCI;

http://i464.photobucket.com/albums/r...rk72/5min5.png

http://i464.photobucket.com/albums/r...72/penflag.png

The relevance to the thread is firstly its a great indicator to look out for a 2B reversal and secondly, a large part of our work is to determine the correct direction for PA... get direction first then look out for set-ups. If you missed the 2B reversal, at least you know you can look out for flags to get long...

I enjoy the clearly-marked charts you're sharing with us, CG, although I am trying to draw less, rather than more lines at the mo...

I'm liking that it gives the R:R 1:1 lately, targets can exceed 25 points...

http://i464.photobucket.com/albums/r...rk72/5min6.png

Hello all. Thanks goes to Div for startin this thread. Quality info that speaks for itself is hard to find.

I'm hoping to go live with this soon but i'll see after i do a little back testing then i'll open a small live account and see what happens with re-quotes, slippage, and variable spreads. Made 12 practise trades this morning. 9 wins 3 losses. I would say it was luck but i've been doing this for the past month with similiar results.

But i do have one question. What is a SUB. I've looked through the thread (albeit lightly) and i cannot seem to find what this represents. Can anyone help me?

set up bar

http://i464.photobucket.com/albums/r...rk72/5min7.png