Flag trading the trend

If i repost the H&S from yesterday;



Slightly different set-up as we have already established the downtrend and thus no H&S, however, the similarity is clear to see;



Despite being the 15sec chart, you can see how easily it is to identify. I stated before it is the pullback occuring literally immediately after the fresh LL (or HH if long), is the key. This pattern happens time and time again and i am left wondering why i keep taking other more risky set-ups which often fail!

I think this is all part and parcel of the game, learning what works more consistently than others. I have been juggling between taking every 123 that i see within a trend, but as we all know, they come in all shapes and sizes. Sometimes, they simply look right in all aspects, but can still fail and ones which you feel are too small or otherwise, go on to win;



The common theme here seems to be, wait for a pullback to take out the last LH (short) or HL (long), then make a new LL (or HH), (ie; a bigger pullback within main trend), again in the above chart, the pullback occurs immediately after the fresh LL, go short on fresh break of this point (+1pip)

PXI this time, again, two bites of the cherry and finding the parabolic working well more often than not for trailing stop;



For the brave, the 123 right at the top once ND formed was a goer. Personally, i prefer to wait for the fresh LL for trend confirmation and use the ND as a 'heads-up'

There i was sodding around with the DAX, testing the S turned R trade and it led to a failure. It also gave a 123 trigger short, which immediately failed, only to then miss a 120 pip death plunge. Bravo markets... bravo!

In all of that, i missed the same set-up on the PXI which worked perfectly, albeit, far less pippage;



This seems to be a recurring theme, with the PXI being far kinder over the past two weeks. I may concentrate on it for a while to see. The only obvious disadvantage is spread relative to pips available on short timescale set-ups.

are these the trades from yesterday Harold:

A core question for a day trader: the "correct" answer is of course to be disciplined and only take the most well-formed setups...but I have this nagging feeling that if you're really in the zone, taking them all is not only what works, but also what maintains perfect focus in a naturally self-supporting cycle.

It reminds me of the ultimately ill-fated, discredited and banned shakesfx ... (not sure if anyone here remembers him ?)...

good eye erasmus

if your trade plan is to trade a certain setup there is no question only a duty to trade the plan

Here's my first and current trade of the day: This is a sim trade. It is a reversion to mean type strategy and I doing some forward testing of it while getting a new project account set up with this broker. I've mentioned this to D in PM's and as I reduce the "discretionary" element of entry over the next few weeks, I will share details here.

So far first profit target was hit (+2 points) second profit target missed by 2 ticks (looking for +4 points on second lot) and stop is at breakeven, and price is close to that level. Back testing has shown that this system is most profitable by letting that second lot either stop at BE or run to target. Moving stop to BE+1 or to lock in a lesser profit amount adversely affects the overall return of the strategy.

Initial stop is 5 ticks on both, so if one uses a 2 lot unit zise, risk is 112.50/unit, potential reward is 300/unit if both profit targets achieved.

As I was getting these screen shots ready price dropped straight down through the second profit objective. A +300 trade. FWIW, this trade came back to breakeven+1 tick three times while I was waiting for that second profit target. This happens frequently enough that it is beter to sacrifice all profit on the second lot than to try to pay for costs or lock in a smaller profit. If you do that, that is exactly what you will get - just enough to cover costs. I'd rather have the extra $200 than a mere $12.50 less commission.

Looks v interesting,dd.

Thanks for sharing and looking fwd to hearing more.

I agree totally : the q in my mind was as to whether one might, for example, have a plan in which one took every single 123 on a fast chart.

The only way to test this imho would be in sim over a reasonable period, during which it would be hard to do anything else !

Edit : that reminds me ... ! Way back when in the early days of this thread (minute charts and CCI), I actually paid someone to program a semi-automated strategy for this. It had on/off buttons on the chart, so I could toggle the strat on or off as I chose (ie. if in tight congestion, I'd leave it off; turn off when I left the screen).

It worked very well some days, less well on others... then one day I forgot to turn it off and went out for the afternoon. When I returned that evening, it had made about 50 trades... VERY fortunately with a small profit (it had been a profit >$2k at one point, but hit a losing streak in the last hour or so). .. and that was that !

Great quote! Write that on a post it note or index card and tape it to your computer monitor!

And what the what is up with that 20 point rip higher on the ES? I guess there must have been some news?

I wish I would have taken a screen pic of this trade but it happened too quick: Long 2 lots @85 and +30 on the YM in under a minute I think!






EDIT: I am using 377 tick on YM

havent been around for quite awhile, looks like things are going well, been reviewing the thread and getting charts set up. Ive been remodeling a rental, hoping to get 800/mth and thats being accomplished here per day. hopefully time will free up for me.

I also tried a quick date with Harold's girl - she spun me round so fast I got dizzy (& stopped out +9) :

+30 long @985 +30 long @020 +30 short at 984 +30 short at 948 = 120 ticks on 2 lots and I think I am convinced that D's money management hit and run style and the YM is a match possibly made in Heaven!

I made an error earlier. I am using 377 tick for YM. The 144 tick is my TF chart, and for ES I have been using 610 tick. Sorry if I caused any confusion.

Just now got short at 914 with a 929 stop loss.

Dare I say yet another +30 on the YM! I was just going to post this pic of my DOM to show I moved the stop loss to +2 and here I am out of the trade.

This is why it is so difficult to post these trades in real time. When the market is open, as D would say, iit is our duty to trade our set ups diligently. I love you guys, but we serve each other best by trading well first, and posting second.

PXI repeating identical H&S set-up;

Here is what it looks like. To be fair, I did get a bit lucky on the short @48. As noted on this chart, the proper entry would have been a sell stop at 38, which would have been filled,. But price stopped at 37 and popped in the blink of an eye to 956, which would have resulted in my -15 tick stop loss getting hit. I missed the first entry, and when price started to fade I just entered with a market order. again, these are based on the 377 tick chart.

On these volatile days, I think -20 stop loss and a +40 or +50 profit target might be better. But for now, as I am always willing to enter the same trade after a loss if the system still calls for it, I will stick to +30 and -15.

So ES sim trade was +6 points. YM trades 5 for 5 @ 30 ticks a piece which is 150 ticks per contract * 2 contracts = $1500 profit. Wow! is all I can say. Very powerful method and money management plan Divergence has shared with us here! Kudos to you, D!

Interesting day so far will be back in a few in trade

long @841 and +30 already: That YM she like to move it move it!






EDIT: I am done for the day. It is 11 AM. I'd keep trading if I were down for the day or if I hadn't reached my $200-$300 per contract goal. But it is now time for me to rest, regroup, and plan. I am considering changing to the YM for my little project once my new account is set up and funded.