Trading With The Flow!!!

DISCUSSION 1:THE EOD REVERSAL

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

DISCUSSION 2:THE WRB IN THE 60MIN FLOW

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

DISCUSSION 3:FAILURE PATTERNS AND THE 60MIN FLOW

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

How do we tackle 2 bar breakouts and failure?

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