Trading With The Flow!!!

Here We will be doing our best to answer any questions pertaining to the 60min Flow method.

Regards,
Moderators OF TS

nice job prateek :) … keep it up

Keep Flowing

Saurabh

Friends

I want to open discussions on filters and its setting and effect on profits. All discussion will be on the principles and specifics will be avoided due to obvious reasons.

This is pertaining to NF only but can be extended to other securities also.

1. A few months back, NF used to trend more than 300 - 400 points one way and we used to catch the trend and add and filters used were smaller as compared to now-a days when NF is rangebound and is hardly trending more than 200 points one way. Some points are lost in pivot formation in the reverse and now we are using around 25 to 33% larger filter and that is also eating into our profits.

2. Now some thought has to be given on pegging the filters to either ATR or volatility. Or some other way?

Kindly give this a thought and lets discuss.

Thanks

Bee

Bee,

Great initiative.
Let me give my thoughts on this. You are right that NF used to trend more few months back. Now coming to the choice of filter, for a well trending security, even a small filter would be enough. The purpose of filter is to prevent triggering of false trades. So, when a security becomes volatile not in terms of the average daily range, but in terms of volatile movements up and down, we would require a larger filter.

So, in my view volatility plays a much imp role as compared to the ATR in the selection of filter.

Kapil

Agreed Kapil,

So volatility, it is. Will have to look up the literature on this — plus NSE has a handy tool now — Volatility index — which is updated daily. So lets do some research and try to link up things here.

Great

Bee

Please do……..am open to ideas.

Great going,Bee,and thanx!

Saint

Yes Bee.

Lets try to use that to come out with how that can help in deciding filter.

Kapil

hi friends

i want to know about the time frame for 60 min flow…. is it like 5 min frm 9.55 to 10.00…. then 30 min till 10.30…. n then 60 min till 3.30…. in amibroker 4.9 this is how hourly charts are shown….. plz help me……

cheers

we trade using 60min charts, meaning all bars on the chart are 60min except 2.
The opening bar, the first bar is 5mins. then we have hourly bars until 3pm. After that, the last bar is from 3pm to 3:30 and is a 30min bar.

MJ-

hi MJ

many thanx for replying…….

cheers

Hi Musicjunkie,

I have also some problem with the TF bars in my IndiaInfoline terminal. I am not able to get bars like 9.55 - 10.00, 10.00 - 10.30, etc. I am getting from 9.55 - 10.25, 10.25 - 10.55, etc only. I mean the 5 min difference. Because of this I am getting values for the bars differently. I tried to modify it, but in vain. Pl tell me what is the solution for this. Thanks in advance.

Regards

dkr113,

Unfortunately there is no way to modify the time settings in IndiaInfoline terminal. The best you could do is to write to them to incorporate this feature. Till then, you have to rely on the charting /data vendors.

Regards,
Kapil

Thanks Kapil for your reply. I will request IIFL for this. Any idea about Angel Broking's 'Anywhere Trading' terminal about this issue? Just for info, any of our friends will be with them?

Regards,
Dhinakar

Dr113, I think you should go in for a paid charting service. Do some searching there are many in india. I think TJ has some great threads on it as well.

Regards,
MJ-

Thank you MJ, I will do that. Because I always get different values for the 30m bars while trading in Miniflow compared to our friends in the Forum.

Regards,
Dhinakar

Hi everyone,
Didn't know where to post this exactly but wanted to bring up something regarding the EOD reversal……

By now we are all familiar with "Reverse to shorts, close above pivot back to longs again with all adds" kind of trades. However for the past hour i'v been going through some charts of various scrips and noticed that the EOD reversal does well the first time, but if its triggered a second time its better to reverse without adds, just initial position (or perhaps ignore it completely the second time ?)

To re-iterate, Suppose we are long nifty with 3 adds, so long 4 lots (1 lot each position). Next day we make a Pivot Low, new highs….we move stops…HIT…we are short now below pivot 4500, before closing we are at 4510, we cover shorts and enter long 4 lots.
Now the next day we open within the range, make a higher PL …new highs….we are sitting pretty with our 4 lots long but yet again our stops are hit at the newly formed Pivot low.
Now we are short 1 lot, price reverts back and above pivot…..here is where I want your opinion. IMHO and limited knowledge, reverse to longs with just 1 lot.

The effectiveness of EOD reversal more than 1ce, that iv seen, looses its value…
I'v yet to include this as part of my strategy , wanted opinions of fellow TS'arians…… :)

time to sleep now…*yawn*

Regards,
MJ-

Hello,

New to the forum.

My sincere thanks and respect to SAINT sir for his invaluable guidance. Also thanks to MJ, Kapil, ST, Puneet etc..for their contributions.

I've Amibroker 5.20 professional edition. I've managed to get past 1 year intraday data (both Cash and Future). I do use Power India Bulls for my trading. Currently facing problem in using PIB for realtime analysis etc..

Now the question is -

1. Which software should be used to get real time data into Amibroker either from Yahoo or PIB or from any other source (suggest any other reliable sources.. please). Few sites offering connectivity from PIB to Ami like TDI, CEMsoft, real data express etc.. Not sure about the quality.??

2. How is the performance and quality of icharts..?? (as an alternative)

thanks in advance.

VK

Hi VK, Welcome to TS!

Question 1, I have no idea on these softwares since iv not used them but most of these websites should offer trials so do ask them. I would think icharts is a good place to start, ask for 3 days trial and then you can decide. Howwver icharts can get extremly slow and can even get stuck, restarting takes ages till then I rely of PIB charts so if you can get a direct feed to amibroker then thats good.

Try all of them and then decide though,
Regards,
MJ-

thanks MJ. As you advised, I will be first going through PIB connector like TDI etc.. will evaluate and will update this site so that others can benefit.

Good day to you..

VK

60 min flow traders,
I reversed on pivot break in RIL and Breakout bar low on Nifty. Now looking at the charts seems like i should have reversed on low of breakout bar in RIL also. But if you compare Nifty charts breakout bar is a clear break out bar and in RIL it's narrow bar. would you take a different approach based on that break down bar or just apply it irrespective of type of bar?

Pattel,

I will try to put forth my interpretation. In 60 min, any single bar treatment for the purpose of shifting SAR has to be necessarily a WRB otherwise pivots rule — meaning, in the above NF example reversing below the breakout bar was not warranted as it was not a WRB. My thumb rule for WRB is 2.5 to 3 times the ATR. Current ATR of a 60 min bar is around 38 to 40 points so this breakout bar does not qualify as WRB. Not all breakout bars are WRBs so we have to be careful. I reversed at the pivot break on NF i.e., below the 3 pm bar lo of 21/7. But the next breakdown bar is a WRB and we can place our SAR at its high after we went short.

Now coming to RIL - same argument is extended here - breakout bar is a normal bar so we keep our SAR at pivot low. Then the breakdown bar in its normal process if takes out the SAR then it is ok and we are short as per the natural game.

So breakout bar has to be necessarily a WRB to consider it for the purpose of shifting SAR. Not all breakout bars are WRBs so have to be seen from WRB formation point of view.

Hope this sounds ok.

Bee

Pattel/Bee/Prabhjeet,

Made a mistake in my interpretation yesterday reg BO Failure in Reliance. Yes Bee you are correct in both Nifty and Reliance. I considered BO Failure in Reliance Yesterday…which I think was incorrect……

But one point Bee….the BO bar maynot necessarily be a WRB….even a biggish bar without any long tails would do. Think of it this way…(i)WRB, we anyways reverse below its low(not getting into the continuation/breakout wrb..talking in general)…..and (ii) pivots we always use to reverse, whether there has been a BO Failure or not.

So considering (i) and (ii) above….where is a situation where u can use BO Failure rule?????? Can you see an overlap here…whats the need to have a separate rule for BO Failure if your contention is correct?

Though this is my openion….and I can be wrong, as I think I was in Reliance yesterday.

Would look forward for Saints openion on this too…..

Puneet

Puneet,

We have not reached a higher level of sophistication. I am still struggling with many areas. What you say will be addressed by Saint in our next round of technology upgradation.

Till now we have been seeing only the hi and lo of a bar and very less importance is given to closing of a bar. Your question can be addressed (about the breakout bar and its subsequent failure) from closing point of view. But it will complicate matters here and I do not have the necessary experience to handle it.

Example - yesterdays breakdown bar was the first bar after July 13 to conclusively close below a decent sized bullish bar or below two smallish consecutive bullish bars - this is the first signal that the uptrend in cracking. Now similar argument can extended to your normal sized breakout bars - glimpse of this Saint has given in his 2 bar failure rule. But for me it will open a pandora's box if not encapsulated within iron clad rules designed for 60 min method. So for the time being lets keep things simple till Saint comes up with his next level.

Bee

Pattel,

I will try to put forth my interpretation. In 60 min, any single bar treatment for the purpose of shifting SAR has to be necessarily a WRB otherwise pivots rule — meaning, in the above NF example reversing below the breakout bar was not warranted as it was not a WRB. My thumb rule for WRB is 2.5 to 3 times the ATR. Current ATR of a 60 min bar is around 38 to 40 points so this breakout bar does not qualify as WRB. Not all breakout bars are WRBs so we have to be careful. I reversed at the pivot break on NF i.e., below the 3 pm bar lo of 21/7. But the next breakdown bar is a WRB and we can place our SAR at its high after we went short.

Now coming to RIL - same argument is extended here - breakout bar is a normal bar so we keep our SAR at pivot low. Then the breakdown bar in its normal process if takes out the SAR then it is ok and we are short as per the natural game.

So breakout bar has to be necessarily a WRB to consider it for the purpose of shifting SAR. Not all breakout bars are WRBs so have to be seen from WRB formation point of view.

Hope this sounds ok.

Bee

Yes Bee……..would not bracket this bar as a WRB.Therefore,no question of raising stops to the low of that Bar.Reversal at 4453 -the 3pm bar low- as indicated by yourself.

Since no WRB,No raising of stops……..this was easy stuff yesterday.Price just fell over itself taking out the low of that breakout bar,the pivot low,everything in one clean sweep……..Presuming price did not break down the way it did,and it closed just below the 4518 area,let's say it closed at 4494.Would have shorted the low of that bar using the 2 bar breakout rule.

Saint

Pattel/Bee/Prabhjeet,

Made a mistake in my interpretation yesterday reg BO Failure in Reliance. Yes Bee you are correct in both Nifty and Reliance. I considered BO Failure in Reliance Yesterday…which I think was incorrect……

But one point Bee….the BO bar maynot necessarily be a WRB….even a biggish bar without any long tails would do. Think of it this way…(i)WRB, we anyways reverse below its low(not getting into the continuation/breakout wrb..talking in general)…..and (ii) pivots we always use to reverse, whether there has been a BO Failure or not.

So considering (i) and (ii) above….where is a situation where u can use BO Failure rule?????? Can you see an overlap here…whats the need to have a separate rule for BO Failure if your contention is correct?

Though this is my openion….and I can be wrong, as I think I was in Reliance yesterday.

Would look forward for Saints openion on this too…..

Puneet

Yes Puneet…….A breakout bar failure is actually a weak sign,but there are instances where the breakout bar fails and does not take out our pivots and we are better off still holding the positions till pivot breaks.A WRB breakout negating the entire bar is a sign of great weakness,and therefore raised SAR's and reversal from there.

There are a few more permutations and combinations of various scenarios that must be added to chip in nearer to the top and bottom………but in yesterday's trade,all correct in reversal at 3pm bar low…………Will talk more about it later,need to get a few things ready before market opens.My favourite topic anyway,about WRB and Failures,so can blabber on non stop ,but a bit later.

Great stuff everyone.

Saint

Hi,

I was also very confused with the "Failed Breakout Bar Reversal". Considering on 9th July, there was a failed breakdown bar reversal at 11AM, but none of you'll changed the SAR to the high of that bar. But if I consider a WRB, as explained by Bee, as breakout bar for all 60 min flow, then it would explain the actions on 9th July.

Just learning the flow. Hope I am not asking a redundant question.

—Bonny

Bonny,as explained by Bee and Puneet above…….9th July saw a breakdown at 12:00,SAR brought down to 11am highs.That SAR was not taken out as the pivot moving filter came into play.

If the question is:Why do we not go above that failed breakdown,plz see again Bee's post……..The SAR is moved only once the Breakdown bar is a WRB breakdown bar.Else,it's pivots all the way.

Saint

And Bonny…….there is nothing called a redundant question,a bad doubt,etc……every question is relevant to remove the cobwebs.So plz feel free to ask.

Saint

Wow, Lot to digest, probably will try after market hours. Thanks for everyone answering. I have more questions, will post after market hours.

saint sir, im using ttadvance which completes 60min bars at 10:55,11:55 n so on my query is that can i follow that or shift to some other software which completes 60 min bars ar 11,12 ect as many times i found that bar/pivot low/high difference in 10:55 bar n 11 bar remains more than 10-15 points,
ur suggestions required

I never applied breakout bar rule in 60 min flow before, but came across these posts in other thread. So everything quoted here was valid except that the breakout bar should be a WRB. Did i get this right? If it is not a WRB we look for 2 bar breakout/breakdown reversal sign.

Saint, i'll wait for your reply. "There are a few more permutations and combinations of various scenarios that must be added to chip in nearer to the top and bottom………but in yesterday's trade,all correct in reversal at 3pm bar low…………Will talk more about it later,need to get a few things ready before market opens.My favourite topic anyway,about WRB and Failures,so can blabber on non stop ,but a bit later."

Was going through the rules of 60 min on this forum and am quoting the relevant portion below which I have not seen before or probably missed out being discussed ever:

D.FAILED BREAKOUT BAR REVERSAL: Supposing a bar takes out a Pivot high and puts us out of Short position into a fresh Long position. Now supposing we are NOT able to take out the highs of this BREAK OUT BAR, we get an indication that the break out was false…and so we reverse to SHORTS again below the low of the break out bar minus the filter. The same is applicable even if we get an add point in a long position by breaking a previous pivot high and we break the lows of this break out bar..the only condition being that the highs of this break out bar should not have been exceeded.
Vice versa for Shorts.

Now in case of a failed breakout (say holding long position) and we add and that breakout bar fails. Now

1. Do we come out of only the adds at the low - add filter of this breakout bar? Which means using add filter in reverse which is unheard of concept here.

2. Do we completely reverse at low - normal filter of this breakout bar?

Adds are a bit tricky as we add at very small filter as compared to entry filter or gap filter. So the add breakout bar may not be that big but big enough to trigger an add and then fail, so how do we treat it. So the above questions.

I have faced this problem with adds often (normally this happens after 2 adds when the trend peters outs) and now find this has been discussed here but somehow missed it.

Thanks

Bee

Hi Bee,
Thanks for bringing this up, will need to re-word that paragraph.
Put simply, as soon as we get a breakout bar failure, outright reverse the ENTIRE position.
IF we are long, whether with adds or without, regardless…..As soon as we get a Breakout failure we reverse the entire position to shorts. A failure means a trend change, a strong one at that, smart to capitalize on these moves.

We wrote "add" so that we do not confuse with the EOD reversal which is applicable only for initial positions.

If still in doubt,or I havnt addressed the doubt you have please let me know, will upload examples and re-word the paragraph completely.
Thanks again

Regards,
MJ-

Excellent,MJ……Is that para above quoted by Bee in the Methods Section?If so,needs to get editted and clarified.

Great stuff,and well done!!

Saint

Hi seniors,

A crude query, does the two bar breakdown failure applicable like 2 bar breakout failure ?

Hi

I just visited the new forum - very colourful. I am looking forward to all the other changes there may be in store.

However, for the present, am posting the last 15 days' chart for Nifty Futures:

I have some queries/misgivings about two things that we experienced during this period :

1. Breakdown Failure :- On two occasions, ie. on the 29th and 31st July, we had breakdown failures. Although in the first case we did manage to save about 80 points before the next reversal, we gave up a higher number of points in the next trade, - all while the market actually covered a distance of more than 270 points in the course of these three days.

2. Add Failures :- Adds were triggerred above the previous pivot highs on the 5th and 6th of this month and in both these cases the market failed to move up higher, and on the contrary it made a decisive turn downwards on the 6th.

No doubt the 60 Min flow is designed to take care of all kinds of situations while giving us profits at the same time, but I was wondering whether it is not possible to extract some points from such breakdown failures as well. Were we trading any other system focussing more on market technicals, definitely we wouldn't let all the points get away.

Similarly, we add above the last pivot break, but in this case the add points came just below a major resistance, which ultimately proved too strong and very soon, the adds also turned into losses. Is there a way to overcome this kind of situation without letting one's personal bias of the market trend, the technical position, etc. come into the picture?

I am sure a lot of thinking must have already gone into such issues, and I would welcome all suggestions and advice.

Makhijani

RKM

The points raised by you are valid. 60 min flow is a very good method but it is not a perfect method. There is no thing as a perfect method. Certain drawdowns occur in 60 min flow especially when script is in sideways motion. That is part of the game. That is what Satya and Prabh have been researching and pondering as to when to go out of the flow and when to come in. As for me I am always in the flow as we do not know when the trend will kick in and we will be left high and dry. The secret of this method is the adds. Go for adds immediately on correct triggers and hold these adds till the trend changes. This is a nerve wrecking exercise but all experienced players have learned to control their emotions. Statistically over a long period of time your account will grow. As this is a swing type of method, the positions entered are lighter than ambush or miniflow and should be within your MM so as to not bother you with the drawdowns. I have given some indication on figures you can expect where your SAR will be at any point of time in NF. If the SAR position bothers you then you are not capitalised enough.

Rest — tinkering with the rules will only bring in grief. Believe me I have been there and have suffered.

Trade well

Bee

Bee,

Thank you for your comments. I was actually in doubt as to whether I should have taken the adds only on the break of the high of the 3rd Aug at successively higher pivots, and not at the points I have marked, but even in that event who could have said in advance that the market would not reverse after going up only a few points above the add triggers. But notwithstanding this, and keeping in mind all the discussions on this issue on various occasions, perhaps some kind of concept could be developed for having special Add Stops, which could later be merged with the SAR once the market moves sufficiently ahead. The other option is, of course, is to treat each add as a fresh trade and keep an independant stop as one would outside the Flow Method. But as you say, tinkering with the flow rules will only result in grief, and I am fully with you in this.

Best wishes,
Makhijani

I have given some indication on figures you can expect where your SAR will be at any point of time in NF.

PS. I'm sorry but I couldn't find what you are referring to, Bee

RKM

On Aug 3 we went long over 12 noon bar hi + f. After that there was no add opportunity as per my reading and my trades.

About rest of your thought process I am not able to comment as I have sworn to go as per the rules laid in the school section for my trading practice.

The link to my relevant post is as under: this just a post for discussions and not for implementation.

http://tradersaint.com/forum/t-139132/anything-on-pivots#post-541841

Kindly shift to tradersainforum as It is very difficult to shuttle here to check up on queries.

Thanks

Bee