Trading With The Flow!!!

Not going into the basics of this Method……..think we already have it all under Methods within this site.

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

An example is on Feb 26th 2009.

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

Saint

DISCUSSION 2:THE WRB -HOW DO WE REACT TO IT?

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