So far,we have seen a breakout that fails,this implies that a single bar broke out of its pivot highs to new lows and then flopped on itself and broke pivots and triggerred SARs.We also know how to manage WRB Breakouts.How do we manage if we get a Breakout(not WRB) followed by a bullish candle and then a huge fall…………The questions are:At what point do we call the move a failure?Must we wait for pivots to break to reverse?

The below is a chart of ICICI Futs in Jan 2009.

Saint

There are Chart Patterns,Gaps,WRBs that work on our charts……and then there are the failure patterns.Failure patterns are just patterns that have not worked as per expectations of traditional technical analysis.For us flow traders,they tell us something in advance before pivots confirm the move.Knowing them is vital and gives us an extra edge in our going with the flow.

1.Failed WRB Breakout:Already discussed above.

2.Failed Patterns:We don't trade patterns in the 60min Flow,and therefore the failures play no role in the 60min Flow……although we will be discussing them all under Ambush strategies later on.

3.Failed Breakouts/Breakdowns:Nothing spectacular here…….we have our breakouts and breakdowns from recent pivots.So,naturally we move our stops to the latest pivot.A breakdown from that pivot or a breakout is anyway our reversal point….so nothing new here.Already in motion.

The breakdown failure pattern is from Reliance Inds,and the breakout failure from Bank of India.How we deal with it is the same,we turn around at the pivot junctions.

Saint

We had discussed about the importance of the WRB in the Intraday MiniFlow………now,here on the 60min flow,it's a bit different.Not to forget that we are Gear 1 traders here,over aggression will kill us off.The WRB can again be divided into the following:

1.WRB BREAKOUT:Here we have higher pivot highs and lows,and then we have a WRB breakout over a previous pivot high,as always a visually obvious WRB.We are now looking for the next bar.If the next bar closes below 50% of the previous WRB(Open-Close),we are reverting to shorts below the low of this bearish bar.

NOTE 1:This is a 2 bar setup…….we need a WRB Breakout+next bar bearish bar closing below 50%.Then only does this trigger……If the next bar is a small bullish bar,and the next bar is a doji,then all of the above is null and void.Stops at the low of the WRB Breakout,and reverse if triggers.

NOTE 2:This above pattern is only in an uptrend……….only in WRB Breakouts alone.Not WRB Breakdowns.In WRB Breakdowns,stops at the high of the WRB.No 50% next bar business……..we reverse only on a break of the high of the WRB.

NOTE 3:The above pattern is not only in an uptrend,but it cannot be the first WRB breakout bar after a downtrend…….the first WRB that we reverse with ending the downtrend and triggerring off a new uptrend,has SAR at low of the bar and we are not really looking at the next bar reversal.The above pattern is usually in an ongoing uptrend creating multiple higher pivot highs and lows and then there comes this WRB Breakout…………We are in eseence looking out for the WRB Breakout Failure and to reverse early.

2.WRB Continuation:We would love to quickly raise our SAR to the low of this bar,and we are not wrong.But another equally important and powerful factor-the Gap Down-can give us a few headaches.Allow price to open up the fllowing day before assessing and moving stops up to the low of the WRB.

NOTE 1:There is no next bar 50% reversal……….reversal if lows are taken out.

EXCEPTION:We have multiple higher pivot highs and lows,and then this current rally puts up another 4-5 Bullish bars and then we have this huge WRB at the end of all of this……..Think possible Exhaustion…….here and here alone,do we raise SAR to the 33% mark,and reverse if triggerred.

LAST NOTE:All this again is in an Uptrend…..In a WRB Continuation move in a downtrend however,stops at the high of the WRB.And even in a move that is possibly Exhaustion,stops still at the high of the WRB.

Any doubts,please do ask under ASK SAINT Section under WRB in60min Flow.

Happy Trading!
Saint

This one's simple,a latter modification to the 60min Flow Method.We basically reverse to our original positions if the SAR is triggerred and then the day closes back to its pivots from where they broke down.Taking an example,we are in 2lots+2+2=6lots of NF,in an uptrend,and then our latest pivot lows get broken down and we reverse with 2 lots………..let us say that after this breakdown,price then reverses direction back to its breakdown point(which is the pivot),we get out of our 2 lots short and get back in into our 6lots long.This decision is made in the last 2-3 mins of trade.

We basically act as if this breakdown did not happen……..and take the few points losses sustained.Price can still gap up,gap down or start even tomorrow.And we will trigger our short accordingly if need be or add to our longs if need be.Basically we expect a significant move on a breakdown of pivots.A limpish move down and closing back to its lows triggers our EOD Reversals and we revert to longs.

When we have a pivot and we are long 6 lots as in the example above………..and the following day,we get a gap down,we reverse as always below the first bar.But an EOD Reversal is triggerred only once the pivot low area is crossed.And if that does not happen,we remain short.

Let us say that we are long 6lots,and we get an add opportunity…..We buy on a breakout of recent pivot highs and then price falls back to the area of breakdown……This means nothing,we are now long 8lots with SAR at recent pivot lows.

The EOD Reversal is therefore a strategy that we employ only on a reversal of trend and its seeming failure.And the point that we are eyeing is that pivot that price broke down from.

All the best!
Saint

The Intraday MiniFlow is a Today Only Flow.We have all kinds of bars that form in a trading day.One of the most exciting is the WRB.The WRB is a bar that is bigger than all the previous bars from a visual perspective.It is a bar that has its open near its lows and its close at or near its highs.How do we tackle this WRB?

There are 2 types of WRBs that we encounter on an intraday basis.

a.The Continuation WRB:We have our stops in place,we have had 2 or 3 up bars and then a WRB.If your stops were at LOD,or at previous pivots,move stops to the low of the WRB -filter.Simple as that……the WRB is a good move in the direction of our trade.Negation of that WRB is enough for us to call it quits and reverse.A WRB in a continuation pattern can go on to make higher highs and lows as well,or it could be the heralding of the end of that move.We do not,as flow traders,want to get in between a good trade,and yet,we want to reverse if the latter scenario happens……………Therefore,stops to the low of the WRB - filters.

In a scenario,where the WRB is huge,rather a Monster WRB……Move stops to the 33% mark of that massive WRB.This is calculated by calculating the difference between the Open and Close of that bar(not high and low) and divided by 3-filter(put a wider filter than usual).If this is hit,reverse.In a scenario,where the first bar is a bearish bar after the massive wrb,we now wait to see its action.If that 33% mark is hit,we reverse and go short.If that 33% is not hit,and it closes below the 50% mark of the previous WRB,raise stops to the low of that bearish candle- filter.If it hits,we reverse.Another scenario is that price moves huge,not triggerring the 33% mark,but goes below the 50% mark,note:we are waiting for its close………if that close is below the 50% mark,we do as above.If it isn't,we wait with our stops at the 33% mark.

Note:This above scenario is only when we get that monster wrb in a continuation move.A normal wrb continuation move,……..we do nothing.We wait with raised stops at the low of the wrb.

b.The Breakout WRB:Once again,this is a WRB that breaks out of a consolidation or pullback past its previous pivot highs…..same as above,once the WRB is completely formed,we raise our stops to the low of the WRB.Next we observe the next bar……if it closes below the 50% mark,we reverse below the low of that bearish bar.If it closes above the 50% mark,we wait with our stops below the low of the wrb.

Here again,if we get a monster WRB Breakout…….we raise our stops to the 33% mark-wide filter.We wait for the following bar.If the bar closes above the 50% mark,we wait with our SAR at the 33% mark.If the bar closes below the 50% mark,we reverse below the low of that bar.

Note the differences between the continuation WRB and the breakout WRB……..Please do ask your doubts and get it cleared up under the Ask Saint Section under the WRB thread.

All the best!
Saint

Move 1 down,break above pivot highs…………..Move 2 in progress.Entry with sf.

Saint

DISCUSSION 1:THE MOVE1/2 CONCEPT

We already have a Larger Moving Filter in place so that some false moves can be done away with.It is not fool proof,but it has saved us from some unnecessary fake outs and false breakouts earlier on in the day.The basic concept is that the very next bar——in Indian stocks and futures,NIFTY,That would mean the 10:00-10:30am bar must take out the high of the first bar.If it does,we are in the trade with our stop losses below the low of that first bar……..so far so good.

If it doesn't,and BAR 2 doesn't take out the filter over BAR 1,although it made new highs……………the next bar,BAR 3,must take out the highs of BAR 2 with the same MovFil(larger filter).We want that big move to get us into the trade,or else,none at all.

Let us now say that BAR 3 has completed in its formation………and voila,BAR 3 takes out the highs of BAR 2 and still not crossed the MovFil.We are still not in the trade……………..now the question is:Could we say that this is Move 1?

Before that,what is the Move 1/2 Concept……..once again,words to describe something as always.Move 1 happens when we get higher pivot highs and higher pivot lows,without our filters triggerring.In short we have a weak uptrend,not taking out our filters.Our MovFil meanwhile is raised bar by bar,when price declines to form a higher pivot low,the MovFil stays at its last increased price.Once newer highs are made,the MovFil is raised again bar by bar.

All through this,higher pivot highs and lows are made without our filters triggerring an entry…………….we call this Move 1.

When the latest pivot low is broken to the down,this is what we mean by Move 2…..our entry on the short side is below the low of the previous pivot low -small filter.From that time,it is all about the small filters.

So back to our first question,is that a Move 1…….3 bars,all HH and HL…….Answer is:Not yet,we don't have sufficient data with us as of now.

Also,it is no more called the Move 1/2 Concept if it triggers a trade in the first place even before a full Move 1 is in effect……then,it's all as usual.Trade trigger will lead to stops with small filters anyway and then all as usual…..so to say Move 1,must meet all the criteria above.

All the best!
Saint