Trading With The Flow!!!

Hi All I trade only 60 min pivots while looking at previous days charts found some patterns based on 60 min pivot which can give quick gain on 60 min time frame also some time can be good idea to add our initial position ………….

similarly i know as we trade the flow method most of us have found their favourite patterns /pivots to trade with more confidently ……….. even some time some pivots become so important it becomes obvious if break then will give good move

I am requesting all our flow friends to share any ideas /views on pivot how can we determine a a potential pivot where we can increase our risk a little bit

Or any ideas comming to mind please post here like Bee's time frame change ,Prabh's RSI etc so that we can pick one idea and do some learning in week ends

So inviting Everybody to Post anything On pivots Here it may be the Wildest of your Imagination about pivot but post it here

Waiting your participation

Regards
Satya

Ok here is Some patterns used to trade need your comment on this

1: Gap Up/down then latter part of the day rally/decline towards first 5 min high/low but unable to cross due to filter or by whisker and mean time it forms a pivot high/low ……….this indicates supply/demand is very high near high/low of the 5min bar if pivot cross then it gives a good move
Again if it hapeens after a good long trend go for it man…………………..
In intra day found though we may not have apivot in 60 min but if it happens on 15 min then it gives good profit for intraday ….. 15 min bar moves towards high/low of 5 min bar,cud not break and pivot formed and breaks then good moves

2 : Price makes a pivot low then moves up but again it moves towards pivot low and dangeriously threaten to break and cud not do so and mean time a pivot high formed if cross then should give a good move

3:price makes pivot low and moves up again it comes to this low dangeriously but cud not break it and move up but tthis second move fails imediately instead of of breaking new pivot high it breaks the pivot lo area which was tested

4: price Gaps Up/Down exactly immediate prev pivot and reacts there open of first 5 min bar not crossed the the pivot indicating validness of the pivot which is tested by the GAP in terms of supply/demand

5: Against Gap then first 5 mini high/low broken to Add , And some time it move towards 5 min high /low and recovers fast we can use this recovery bars high /low for quick gain

Regards
Satya

Wow Satya! will start reading up after 3 , Looking forward to learning from you.

And the honour of having the first post on your thread :)

MJ-

Hi Mj thanks i wanted to upload all my softcopy diary here with this thought its around 15 charts can you suggest any other site where i can do this at one go in imageshack only one chart at a time i think

Thanks again and need your ideas/suggestion also

Regards
Satya

Imageshack allows multiple upload as well.
Once you click on browse and choose your file, click on browse again, it will add a 2nd file, and keep doing so until you have all your 15 images place, then upload.
Getting a peak into the masters diary, what a great day

Good luck ;)

MJ-

Excellent Satya ji, cannot gulp down whole thing at First read so will need to go through the whole post 3-4 times. This is what a bunch of experience can do.

Thanks for wonderful ideas!!

Some very great observations by you Satya. Really amazing. Though we all have been trading these..never thought of assuming greater significance on these patterns.

Will go through more charts to confirm and also will discuss if I find something equally good.

Thanks a lot,
Puneet

Hi Mj nothing spectacular you will find in my charts going to post these are what i did or would have done …………….
Thanks puneet and prabhjeet

Regards
Satya

Here Goes the charts ………………

Regrds
Satya

Regards
Satya

Ah,have a lot of ideas on this………will go through later in the day.

Saint

Ah,have a lot of ideas on this………will go through later in the day.

Saint

wow sir anything based on pivots please post will try to learn from you ……………

Regards
Satya

Whooops Satya off to a big start. Have to see all this at EOD.
Bee

Thanks Satya,

Great charts.. looking through them…:)

regards,
pramod

Thanks Satya for sharing these trading ideas.

Kapil

Satya,

Moving this thread under Strategies.. better to keep it here.. rather than under trades ..:)
Hope you are fine with it..

regards,
pramod

Ok no problem Prasun but this thread is for new ideas ……… i have no problem if u move to any section thanks for interest and want your participation also

Regrds
Satya

Thanks Bee,Mj,pramod,puneet,kapil ,prabhjeet need your ideas also please post any idea u have regarding pivots

Regrds
Satya

hello satyen sir..thanks for all the hard work for every ones benefit….have been following ur charts for some time now..great work sir..thanks for explaining each and every step..

Fantastic/Amazing Satya….Keep them coming….

Thank you Satya , Great Collections

JV

Thanks satya for some great charts. Will have to spend some time, will be doing so during weekend.

Thanks
Rajesh

Awaiting Sirs feedback

Ah,have a lot of ideas on this………will go through later in the day.

Saint

Yes Rajesh Waiting to get some ideas from dear Saint to work on week ends

thanks all

Regards
Satya

Hi ALL Todays Gap trading ……. As Gap Was Not Huge and high was not exactly saved or not retraced below 5 min high was bit nervus but still took the trade not great day but it worked a bit

Regards
Satya

nice thread satya,

trading gaps for intraday is a good idea, as you have noticed whenever it opens with a gap
whether in the direction of the flow or against it, it gives movements on any side.
we can also try trading 15min pivots for intraday. i had looked into it, but on the days when market
is not trending it causes problems. but that problem can be rectified with the ideas by saint and other
senior members.

congratulations for first colorful chart :)

Thanks SO yes first colorful chart but i could not make candle color in black and white in icharts as u also use ichart can u guide me

again yes in non trend days it gives whipsaws we can work on it …………. but this chart is live example of rule no. one posted in first post high got respected and then pivot low break this is one pattern even i trade in 60 min

Regards
Satya

this how to change color in icharts…

Ooops,,,, i dont know how to attatch image

no problem, click the button between timeframe and volume and turn it black n white again :)

Thanks but if make candle color to white it dont shows as back ground color is also white is there anyway to change background color

Regards
Satya

satya choose bullish also black and bearish also black :D luk what u will get … u will get what u luking 4 :))

He He yes Got what i wanted thanks neeraj

Regards
Satya

hey thanks niraj,,,

i also wanted to go black n white :D

netime ….. :)

btw its neeraj … :D

neeraj
sorry for mistake

will take care next time

ahhh sacred…..call me nething yaar…. :D c'mon…….

no smileys in d forum :(

Haven't had time to bite into this yummy thread………later on in the day,Satya.

Saint

wow sir waiting your view /teaching in this thread thanks sair actualyy was bit bussy thinking about RSI have posted in neerajs thread once done with the logic etc i may start working on Divergence

Thanks sir waiting for your teaching

Regards
Satya

Hi Saint Sir & all Seniors

I am silent followers of flow methods in Traderji .

In case of Gap Up or Down , I see something use full , Please check it out .

1. After 3 to 5 days Sideways movement if Market Breakout from Gap ,it is most likely that it may continue in direction of Gap .

2. After 3 to 5 days Directional move (one way) if Market open with Gap in Direction of flow , it is most likely it may reverse its direction .

3. If Instrument Open Gap Up and 1st 5min candle is Bearish It is most probable that It may reverse its direction to down and If Instrument Open Gap down and 1st 5min candle is Bullish It is most probable that It may reverse its direction to Up .(In mostly 2ND case ) and in 1st case 1st 5 min is bullish bar if breakout from range on up side and 1st 5 min is bearish Bar in case of Break down then continuation of trend .

4. If Instrument Gap Up from Previous Day Range ,then if any (in most case bearish bar) in 60 Min's price come inside previous day range (High) then we may reverse our position to short if that bar low - filter price Trigger and If Instrument Gap Down below Previous Day Low then If any bar cross Low from down side (In most case bullish bar) we may go long with that Bar's High + Filter .

5. If we are Long in Flow and If Instrument Gap up then we may also use previous day last bar Low - filter and If we are short and In flow If Instrument Gap Down then we may use Previous day last bar High + filter as SAR.

Thanks & Regards

Harish

Thanks harish

Regards
Satya

Its very nice to see how price has been respecting days low sice 1 hr

Satya

Its very nice to see how price has been respecting days low sice 1 hr

Satya

Could not make much though was long …………… huh

Regards
Satya

Hello,

sorry to disturb you people. though this thread is only about pivots, could not stop myself
from posting here. i am thinking about using Simple Moving Avg. of 20 periods but have not
tested as i dont have enough data.

there is nothing new about it. we have this beautiful system given by saint sir, we are only following it.
but want to see if using 20 SMA works for trend identification.
idea is that we take a long only when price is trading above 20 SMA and and take short
only below that. only in last one week it would have saved us from to bad trades.
see the chart i m posting here. on 24th it would have stoped us from taking a short as
price was trading above SMA which turned against us and today it would have prevented us from long as price
is trading below 20 SMA.

just an idea, have not backtested it…….if someone has time and data
then please backtest and post reusult here.

waiting for others views

SacredOcean

Hi SacredOcean very nice you posted your idea definitely will check prev data with this idea …………
Again Bee also use 3 and 13 period EMA cross over to identify reversal pivot if he is around please throw some light on it ………..

Regards
Satya

Nice …. one of the above pattern occured yesterday ……….

Regards
Satya

hi all one of the above pattern happening find todays low very interesting ………lets see what happens
if breaks then can be a very good ADD ?

Regards
Satya

Will be nice to see how it behaves at prev days low

Regards
Satya

Nice move ……………

Regards
Satya

Very Good observation on this pattern Satya

Hello Satya…

One of the Gems from Saint…I still keep watch on this kind of situations.

May be useful for you or may be redundant if you might be checking it

Kaiser.

Hello Sa

tya…

One of the Gems from Saint…I still keep watch on this kind of situations.

May be useful for you or may be redundant if you might be checking it

Thank you kaiser ………..

Very Good observation on this pattern Satya

Thank you prabhjeet ji ……… please post any price action you have marked …….

Regards
Satya

Hi Kaiser look at this with same logic

Regards
Satya

Thank you prabhjeet ji ……… please post any price action you have marked …….

Regards
Satya

I dont have anything as straight forward and as logical as you have put it Satya, but there's one peculiar Pattern that catches my eye on every chart 60 min. Daily or weekly and thats 1-2-3 High or low that comes at a Price which is actually at Intermediate High or Low, whenever 2 point is broken it gives much more profit if Point no.3 does not go below Point no. 1 for a Low and vice-versa for Highs, will come up with example

I dont h
> ave anything as straight forward and as logical as you have put it Satya, but there's one peculiar Pattern that catches my eye on
every chart 60 min. Daily or weekly and thats 1-2-3 High or low that comes at a Price which is actually at Intermediate High or Low,

whenever 2 point is broken it gives much more profit if Point no.3 does not go below Point no. 1 for a Low and vice-versa for Highs, will
come up with example

Wow thanks for shareing one chart is enough…….. plz post it today

Again i think the move between 1-2 and 2-3 should be cover by price not by Gaps etc anyway it was my thought

plz post a chart

Regards
Satya

Wow thanks for shareing one chart is enough…….. plz post it today

Again i think the move between 1-2 and 2-3 should be cover by price not by Gaps etc anyway it was my thought

plz post a chart

Regards
Satya

Firstly Satya we mostly face Gaps in 60 min charts foe Daily its a rare thing, and I have never seen it happen on Weekly, next to impossible on Monthly

Secondly, supposing we have a Gap past Point 2, that should not be a problem if the Candle gapping up is a White candle ( for longs), if its a Black candle then the High of the candle is the Potential point 2 and we have to wait for this new Point 2 to be taken.

Whats the most intresting part regarding 123 pattern is that if we form a 123 low and point is taken out, we can put a stoploss with a minimal filter below Point 2 itself and no need to give room till Point 3 so you would be able to put a larger position

Prabh

Interesting. But kindly put up a diagram, (hand drawn on paint would do fine) for better clarity. Daily bars interest me a lot.
Thanks
Bee

Prab

h

Interesting. But kindly put up a diagram, (hand drawn on paint would do fine) for better clarity. Daily bars interest me a lot.
Thanks
Bee

Yes plz post a chart ….

Regards
Satya

Satya and Bee stop trying to make fool of me guys, I know you guys completely understand what I am trying to say. Have a look at the Monthly chart of Nifty when we made a top in 2008 or when we are making low now

Phew, here are the charts anyways, Nifty Monthly charts

Satya and Bee stop trying to make fool of me guys, I know you guys completely understand what I am trying to say. Have a look at the
Monthly chart of Nifty when we made a top in 2008 or when we are making low no

Dont think like that prabjeet ji wanted to know what you wanted to say you know i listen to you seriously

Thanks for the chart

Regards
Satya

Regards
Satya

Dont think like that prabjeet ji wanted to know what you wanted to say you know i listen to you seriously

Thanks for the chart

Regards
Satya

Just joking Satya Bhai, I know you always respect others' views. Do share your findings on 123 , but keep in mind that Low or High should be significant one when taken in account with the Time- frame for which we are seeing 123.

Also another observation regarding 123 is that if we have suppose 123 High on 15 min. with 60 min. still in Uptrend, than mostly the Downmove will stop at previous 60 min. Pivot low. That means 123 pattern mostly respects the Pivots of Higher time frame so we Trade with a Target.

You will have to Eye Ball the charts for these observations if you like them :)

thanks a lot satya…. this thing is too hard to gulp at the first time :) :) …… a lot of thinking has surely got into it :)

Thanks for making us to think too

Keep flowing

welcome friend …….. anything you think about pivots or any new idea using pivots please post here without any hesitation

Regards
Satya

Just

joking Satya Bhai, I know you always respect others' views. Do share your findings on 123 , but keep in mind that Low or High should be significant one when taken in account with the Time- frame for which we are seeing 123.

Also another observation regarding 123 is that if we have suppose 123 High on 15 min. with 60 min. still in Uptrend, than mostly the Downmove will stop at previous 60 min. Pivot low. That means 123 pattern mostly respects the Pivots of Higher time frame so we Trade with a Target.

You will have to Eye Ball the charts for these observations if you like them :)

Sorry prabhjeet bhai did not check this pattern will surely do some reading and will get back to u if i get any doubts

Regards
Satya

Interesting now lets see how it turn out

Regards
Satya

prabhjeet and Bee here is a example of divergence failuer ……… which resulted nice trend

Regards
Satya

GAp in the direction after a divergence ………..

Regards
Satya

Satya I think I have still not been able to properly put my point on How to treat Divergences and which one is a Valid Divergence set-up.

Look if we keep on watching indicators they will show Divergences hundreds of time before the Trend actually exhausts, to be precise " A Bearish Divergence " during an Uptrend means the Trend is still continuing, read carefully it means TREND CONTINUES. For a Divergence to be valid, for lets say Uptrend needs to fill following conditions before we consider a reversal :-

1. There should be clear Divergence between the Peaks of Indicator and Price of stock.

2. There should be a prolonged Uptrend before the Divergence occurs, Divergence in a sideways markets are usually false signals.

3.The most important thing is that if we have a Bearish Divergence, it is important that the Lowest Point between the 2 Peaks in Prices is Broken for a reversal to happen, not until then we consider a reversal.

Most of the Divergences you have marked have not given a valid reversal. I see one Breakdown reversal in Last chart where Lowest price between 2 Peaks got broken and we had a good move down afterwards i.e. Bearish Divergence marked between 6/2/09 and 13/2/09

Satya I think I have still not been able to properly put my point on How to treat Divergences and which one is a Valid Divergence set-up.

Look if we keep on watching indicators they will show Divergences hundreds of time before the Trend actually exhausts, to be precise " A Bearish Divergence " during an Uptrend means the Trend is still continuing, read carefully it means TREND CONTINUES. For a Divergence to be valid, for lets say Uptrend needs to fill following conditions before we consider a reversal :-

1. There should be clear Divergence between the Peaks of Indicator and Price of stock.

2. There should be a prolonged Uptrend before the Divergence occurs, Divergence in a sideways markets are usually false signals.

3.The most important thing is that if we have a Bearish Divergence, it is important that the Lowest Point between the 2 Peaks in Prices is Broken for a reversal to happen, not until then we consider a reversal.
Most of the Divergences you have marked have not given a valid reversal. I see one Breakdown reversal in Last chart where Lowest price between 2 Peaks got broken and we had a good move down afterwards i.e. Bearish Divergence marked between 6/2/09 and 13/2/09

Thank you prabhjeet for your help yes was not thinking hese things plz send me some material if possible

Regards
Satya

My view ;

Regards
Satya

Nice Fall lets see how it reacts at support…………

Regards
Satya

Did not know where to post it.so thought of posting it here…This image can be for newbies for understanding the concept.The Chart is a hourly RNRL spot chart.Why spot, because thats what i trade because RNRL's lot size is too much to handle for a person like me.Have bought RNRL in cash and by trading in it by the flow method have bought down by cost of holdings to minus :) … The point that i wanted to make here was suppose a newbie wants to trade the method but fears venturing into the futures market then buy some shares in the spot segment ( or if u have some in ur portfolio do take a part of them )and apply the flow to it.This would enable u to take a short opsition if the method demands so …

Keep Flowing

EDITED :- the green points are long position points and the red are short positions point… the latest range is of 57 and 58.2 as the boundaries..add to them filters and u ight have a potential trade setup

Hi saurabh cud not get u how u short in cash market ??

Regards
Satya

my view ……..

3300 not broken convincingly then break out from pattern

Regards
Satya

hi satya Sir….thanks a lot for so many charts to ponder :)

The method i use to short in spot segment for overnight is as follows .. I had bought some quantity at lower levels , so i can freely short those without any risk and for stocks that i have bought at higher levels i take out some portion of that for the purpose …

PS :- is there any source to get the NF or for that matter HOURLY data for any stock future on EOD basis ??

Hope i answered correctly

Keep Flowing :)

Saurabh,

PS :- is there any source to get the NF or for that matter HOURLY data for any stock future on EOD basis ??

For futures Ieod data you can get all data from the following link:

http://www.4shared.com/dir/1945306/b41e3d61/Intraday_Future_data.html

For stocks and commodities try this:

http://www.desitradermall.com/dtm/datadownload.php?mode=sieod

Happy Trading

Bee

hi satya Sir….thanks a lot for so many charts to ponder :)

The method i use to short in spot segment for overnight is as follows .. I had bought some quantity at lower levels , so i can freely short those without any risk and for stocks that i have bought at higher levels i take out some portion of that for the purpose …

PS :- is there any source to get the NF or for that matter HOURLY data for any stock future on EOD basis ??

Hope i answered correctly

Keep Flowing :)

Hello Saurabh leave that Sir var feel uneasy with that only Satya is enough , again thanks for answer we have to have some stocks in our Demat for traading flow method in cash …nice

Regards
Satya

Satya

Shorting in cash, a stock, which is not in your demat account is called short selling. In such cases, if you do not square off (buy back) your trade at EOD then severe penalties are there - as the person who has purchased from you will not get the delivery of shares you sold him. So be careful. Sometimes it is not possible to square off the trade due to power or internet connections failing, so it is a very risky game.

So it is always advisable to short those shares which are in your demat account and never exceed the quantity therein.

Some brokers like ICICI have a compulsary squaring off policy of short sell positions at around 3 pm.

Be careful.

Bee

Thanks Bee hmmmm yes its not a good idea though ………….. what i learnt from saurabh is if u have 10 relnatualr stock and in 60 min flow short triger then sell those stock and buy back when buy signal there in 60 min flow

anyway i m not going to trade stock for the time being as less money and MM dont allow so rather waiting for lot size to decrease (heard from friends )

Regards
Satya

Good idea Satya. New people are trying 60 min flow in cash segment with nominal amount of shares in cash segment to get a feel of 60 min flow. You are already a veteran, so avoid.

Yes, stock futures have become very expensive and beyond the reach of common small traders. Lets hope SEBI/NSE come out with mini futures for stock soon.

Happy trading

Bee

thanks Bee and Satya

Keep Flowing

Hi all yesterdays action …………

Regards
Satya

Is this a Flag ?????// then target ??

Regards
Satya

Prabhjeet please see we have valid divergence on weekly which comes very rare ………..??http

Regards
Satya

Nice observation Satya, looks like a Divergence has been confirmed on Weeklies, so we may be in for Good upmove. Gold gave a Divergence on Dailies at 13990 low and has already hit 14780, almost 20% move so where can Divergence that too on weekly on Nifty take us???? :)

Nice Break out is it a triangle Break out ??

Regards
Satya

Lets see what happens

Regards
Satya

Lets See this break out where it takes us

Regards
Satya

One of my Friend was talking about Flags etc in daily chart ……. so thought can we use this in 60 min flow trade also to have low risk entries we can use flags , consolidation , pennants , chanels in 60 min flow

Like in following chart we have short trade then we wait to entry into the down trend by breaking the trend line

Okkay did not check the past charts just a thought …….

Regards
Satya

Regards
Satya

:) great post as always Satya

MJ-

Thanks MJ Ideas is yours i am going find a trading plan if possible in this week end to trade this

Regards
Satya

5: Against Gap then first 5 mini high/low broken to Add , And some time it move towards 5 min high /low and recovers fast we can use this recovery bars high /low for quick gain

Hi all find GAP against the trend interesting even if it become a break way gap and changes trend it gives some price movement in the direction og GAP

So in my view Gaps against the trend are sweet to trade as market never sits or gives much false break outs after such a GAP waiting others view on this

Regards
Satya

my view on GAP

Regards
Satya

Learnin Gaps …………………….

Regards
Satya

Market in consolidation mode …….

regards
Satya

Learnig Gaps …….

After long down trend we have gap down ….. with MACD and momentum indicator RSI divergence Then is it a Exshustion GAp ??

Lets See

Regards
Satya

I think I agree Satya, looks like we are setting up for an upmove, in line with the flow.

Thanks for posting my friend,
Regards,
MJ-

Hi Mj trying to learn Gaps ……. lets see how it pan out

Regards
Satya

I am short in NF and this is a visual gap in my direction of trade. For shorts and gap in direction of trade - I wait for pivot to form - no gap rules for me here. Exhaustion gap???!!!! Lets see.
Bee

So we closed the gap ………… lets see how it pan out as some expiry game will be happen again and we may be wrong

Regards
Satya

Break way Gaps are easy to identify/trade any thoughts on continuation GAP ……… Bee , MJ and others need your idea

Reagrds
Satya

Satya,

Too much analysis will lead to paralysis of action. Enough knowledge is there in the rules plus your extensive experience in 60 min flow trade to trade gaps comfortably now. Virtually all scenarios have been encountered and discussed in this method from Oct 08 and by now people (old ones) have understood the gaps and play as per their reading of the situation.

As far as I am concerned, I look for other areas of knowledge in trading from trade-ability (my trading ability) which by now I know what I can handle now and what is best left to be tackled at a future date with maturity in this field.

But the emphasis is to acquire knowledge which you think you can use in your trading - pure academic study is not for me for the time being.

Happy trading my friend:-)

Bee

Thank bee… for your advice

I find this pattern on Gap days is logical and nice to trade for continuation gap have seen in past also this happens so asked if there is any other thinking you have to learn more Gaps in terms of supply/demand

any way i am trading GAPs which are against the 60 min trend for some time some times it becomes break way gap and some times it turn out to be continuation of prev trend …….. i trade these gaps as separate plan

Regards
Satya

Good morning all look at todays opening though a small gap ………

Regards
Satya

Nice Sideways a break out in either direction or break out then break out failuer or a break way GAP would be nice one to trade

Regards
Satya

Nice break out Lets see how i pan out but most of time before any major event nifty gices some hit …………

Regards]
Satya

It Failed and we traded …………

Regards
Satya

Regards
Satya

My View of Today ……………

Regards
Satya

I Though Will not Bet on this Gap As a Continuation Gap as trnd is little bit old now Even though it satishfy the the continuation pattern still i think this way

Reards
Satya

My View ……………..

Regards
Satya

Satya,
I see that you have shifted to candle charts from bar charts. Good - personally I like this better.
1. Now did you shift your SAR when you made this chart? The current bar is yet to take out 3 pm bar hi of yesterday in your chart. Of course now as I type this it is already breached. Or you shifted the SAR after 5 min bar on the basis of sideways pivot made yesterday?
Bee
PS: OOOPs — Sorry - probably Satya and me are long rest would have gone short yesterday. So the above is from long trade point of view.

Hi Bee Mornin it Nice you have marked Shifting of Bar to candle yes i do this as when i need to look out for only pivot need to avoid all other information to avoid confusion to look rally and decline for validness of pivot then only Bar charts But when need to look for minute information like Price rejection from previous S/R etc then Candle chart

Ok did not gave much importance to yesterdays 3 pm high as this gap making yesterdays low as a valid pivot if ther was no Gap price opened near close or a very less significant Gap then sould have waited for a rally etc for more confidence and would term as a sideways pivot if there was no rally

So as soon as 5 min bar complete i was happy ……

Thse are my views only may be incorect

Regards
Sata

Minute information ko maro Goli yh toh sab tod diya ………….

Satya

Regards
Satya

Fantastic charts Satya,
Keep posting you have many fans such as myself

MJ-

Thanks MJ ……

Regards
Satya

Fantastic charts Satya,
Keep posting you have many fans such as myself

MJ-

Ditto
Bee

I am posting some thoughts on gaps in Satya's thread here because lots to charts and discussions around gaps has taken place here. At least Satya would be interested in what I have say about gaps:-)
Bee

Friends,

I have something to say about gaps, which has been quite difficult to handle and I remember Saint’s attempt in explaining visual gap and changes in gap rules during our formative months in this method.

Now I have been trading NF (all figures, charts, and arguments/logic is pertaining to NF only and I have not done any work nor do I have any experience of similar nature in any other script but the applicability can be checked if found worthwhile).

Now lets look at some figures in NF. Daily bar ATR is around 130 points, 60 min bar ATR is around 40 points, at any point of time our SAR (including the filter) is between 80 to 120 points away from the price action. In short this 120 points will be left on the table and is deemed as risk/investment in this method.

Now coming to gaps – we see gaps virtually daily in NF. Gaps come because of the overnight change in the sentiments. Now in order to bring these gaps in the flow and as depicted in the chart, I have not taken gap rule anywhere i.e., to bring the SAR at high or low of the first 5 min bar anywhere but always kept my SAR at the last pivot and waited for a new pivot to form. Gap definition here is previous days highest/lowest less the opening price (absolute value – people who struggle with their young school children’s maths problem will know this term others would have forgotten it – suggest googling) if the gap is outside previous days range. Now in the chart the biggest gap encountered is of 50.5 points. The thumb rule here is if a gap is beyond 80 points (2ATR) then it is prudent to use the gap rule otherwise it is best to let natural pivots take their course.

This is similar to WRB treatment where I take the thumb rule of 2.5 ATR for a bar to qualify as WRB.

Gaps less than 80 would mean SAR will be 200 points away and that is manageable to some extent but if the gap is a big one say above 80 then protecting the position from excessive exposure (in case of gap against the flow) or to shift SAR further into profit territory in case of gap in the direction of flow, is warranted.

This is a more conservative approach than the present gap rules but I find it easier to follow as we encounter gaps daily in NF and have not suffered much.

Open to discussions.

Thanks

Bee

…..great points as always Bee. But why not book your longs below the opening bar low (without getting into fresh shorts), if the bar is red…and take Shorts only as per what you mentioned above. Of course, course correction can be taken if things dont turn up as planned. (This is talking only about Longs….vice versa for shorts)

Just another view, though you surely would have thought abt it.

Puneet

Puneet,
Yes can be thought of - but of late I have become somewhat of a flow purist and am averse to exiting on anything except on pivot. But unlike Satya who sees only major visual pivots I see pivots like you do - ruthlessly - all pivots - no compromise on those - rest I would like nature to take its course in 60 min flow. That is why I am conservative on gaps, breakout bars,etc.
Profit taking etc I am play 5 min chart etc and that is a diff setup. 60 min is something I interfere least:-)
Have learned a lot from you too, my friend, thanks
Bee

I am Sorry Bee Did Not Saw your post as was bussy Sorry again will go through the posts and reply back i have done my own way of Gap studies will post it to get some feed back from you

Dear Punnet Some time we have to omit the color of first bar after a large gap it is not unnatural that we will have some selling and we may have red bar but taking th overall messege from gap it is a profitable set up …… Even one can trad only Gaps as Bee said defining a Gap is bit difficult he presents a nice idea to use ATR to decide whether to take a Gap for trading or not

Hi Bee Can you plz tell me how to find out ATR though know the basic never used it …….

Satya,

ATR is average true range of a bar calculated over a number of bars. Say for example 60 min bar of NF. You can take say 14 or 20 or 30 bars and find their hi and low and take average and get the range. But this is done by the software also. You are using icharts - they have this facility. Open the chart and select a TF say 60 min or daily bars then select ATR from the indicators list and feed in the number of bars over which you want this ATR to be calculated. A separate line will be plotted in a new window. You can take the last figure as the current ATR.

Same will be there in Ami. I have meta so I cannot say much about ami.

Bee

Thanks a lot BEE