Flag trading the trend

good one tim. Tweak trading hilarious

Hey JT I heard an old song by chubby checker bet you didn't know the flip side of that record was let's Tweak again like we did last summer

Been travelling the last two days. Now back in Ukraine having taken care of business for the last month in UK. I can now concentrate fully on trading again.

I have really enjoyed the recent topic, especially as i have been 'tweaking' like crazy myself for the past 4 months. However, tweak no more, i now have my final trade criteria.

The reason i never post my points total gains, is because i trade many different pairs/stocks/index's etc, thus the targets vary widely and are mostly percentage based.

It has long been a battle for me, to decide whether to concentrate on the one chart and have multiple reasons for a trade, combining many different styles to stave off the boredom periods whilst out of a trade and waiting for one to come along vs having a very specific trade criteria and thus scour 20+ charts looking for a set-up.

This was further complicated by another question? How specific do i want to be? Am i chasing very high probability and thus less set-ups or shall i be a bit more vague upon criteria and thus trigger more trades but suffer more likely losers, (but hopefully still profitable because of the volume of trades and still a positive success rate!) if you follow me?

I decided it was better to be stricter and thus have a better success rate, but in order to combat boredom, look at multiple charts.

I have had for a while now, two big screens split into 4 charts on each (thus capacity to watch 8 charts at a glance) at both my trading desks in the UK and in Ukraine.

I keep to the tightest spreads pairs and index's etc with small timescales and then i follow the hourly/daily charts for select shares, (a smaller timescale than that and the spreads kill any potential R:R percentages!). The beauty of this is that, the 20 or so shares that i follow on these larger timescales only need checking once a day or so, to see if a likely set-up is forming and if so, they are left open to watch.

So despite this being based on the same ideas this very thread was based on, i have kind of combined everything to create a 'perfect storm' for a trade set-up. There are around 4 or 5 criteria for the perfect trade, but of course, this does not always happen. My battle is with deciding whether to take a trade when less boxes are ticked. This is currently my work in progress. We all know that our biggest downside is taking something that our minds see as being right, whereas a neutral bias would flag potential trap/opposite likely result etc etc.

The trade criteria. Well perhaps let me first start by saying that i can not ignore my EW knowledge here and often refer to it, to give me an overall bias.
An overall analysis of the FTSE daily chart in early February suggested to me that a bottom was in for the markets;



this is the story so far with current chart;



In between this, the 1 hour chart broke down from the low in a clear 5w, with wave 5 being 61.8% of prior wave 3 (this is standard EW stuff!)



The ensuing 3w corrective abc move showed wave 'B' making a fresh high in an 'irregular' move. My proof is that wave 'C' was exactly 161.8% of wave 'A';



This is a very bullish indication and usually means the following cycle will be extended.

So, ok, i didn't really need to post the EW stuff, but as i say, it is good to have an overall bias relevant to the timescale being watched. With that in mind, here is now a chart of my 'perfect storm' trade and the reason why i piled into Sainsbury's first thing Monday morning!



Thus now the relevance is clear! Ok so we have first of all a retrace of 61.8% from the prior cycle, coinciding with Positive Divergence. A break of last LH to make our HH. This is my favourite Cup & Handle trade. A pullback with a 123 creating a nice flagline, a simultaneous break of the flag, triggering the 123 and also with the trigger bar returning the CCI to above the 100 line.

The result is that the 123 becomes subwaves ('i'&'ii') of the powerful wave 3. We do not get any 'heat' and also know that in all likelihood, there will be further highs in the event of a pullback, to complete the cycle, thus the position can run to a new high.

My perfect storm. Now... do i still take set-ups which only satisfy a lesser number of criteria???!!!

Here we do not have any divergence (hidden or regular), so that is one less box ticked, also the retrace did not conform to any recognisable fib level, however the set-up is still strong, with a two legged (abc) structure..
Cup and handle, flagline drawn off of the top of 123, trigger candle also above 100 CCI. Good to go;



After the fresh high is reached, we have formed Negative Divergence and thus at least caution for further set-ups, or indeed possible reverse C&H formations to the short side.

This next chart highlights my dilemma and why it is so difficult to stick strictly to criteria;

Dax 1min couple days ago;



Using fibs, it appeared that an abc move had completed with wave 'c' being exactly 200% of wave 'a'.
But...
I told myself that i needed at least a clear 123 to trade off of the line. It didn't materialise, or at least, nothing that i consider a clear cut 123 and i watched the PA rise without me. There wasn't even a clear LH to break on the way back up for a reversal. Hey ho.

In the past i may have wimped out from this one, EurJpy 5min earlier, but the addition of CCI above 100 on break out bar which triggers the 123 swung it!
Again, it's not what i call a perfect storm trade by any means, but several boxes ticked meant it was worthwhile risk;

When you added the CCI, you promised that it would be the LAST TWEAK. YOU BIG LIAR. You change everything within three weeks.

Joking aside, let's hope that this is really the last one. If the methodology is getting simpler and simpler, it usually is a good sign. Instead of looking at two charts for setups, it is now back to one.

If I read your chart correctly, you are using range bar chart, the whole bar instead of just the closing price. Right ?


Just my two cents.

you are correct

Hey CG looks like a whole lot tweaking going on there

What color is this paint we are watching drying

Tomorrow is NFP, and given how little reaction traders have had to data the past two days, I suspect that today will be narrow range day. That is just a suspicion and not trying to predict. I'm ready willing and able to trade should a set up come; but right now we may have just seen the low of the day, and the high of the day might not be much higher than yesterday's high, if that. It could go ripping or collapse, but right now I think that unless someone gets a leak of tomorrow's NFP number, the futures will churn until tomorrow.

Indeed H, indeed!

My missus is learning English and she was attempting to read this over my shoulder... asking what it was... i said 'twerking' and after explaining it, she appears to be grasping it quite well...

So you have tweaked the tweak by twerking

We could continue these jokes well into next tweak... )

Took 2b on a pb to 60 for +15

in process of testing but using r13 chart with sma for trend direction and 333 for signal seems like a good idea .. gave this so far today:

Nice John same principle find trend wait for pb find entry manage trade make money

in a 123 short from 47 looking for 30

target hit

top work Harold .. hat trade?