2017

Nov
23

The flag Pattern Is a Continuation of the explosive movement

We continue to publish material from the archives

Flag Patterns

  1. Explosive movement marked by the speed and dynamics of movement. Ie. When 20$ the stock moves up 70 cents and more, for 1-2 minutes.
  2. This setup can be traded as long, so in the short. Beginners should focus on long positions.
  3. This pattern usually develops, because out hot news. Therefore the market has little impact on this pattern.
  4. What's it like to this type of movement on the chart? On M1 chart you will see a large explosive vertical bar. The following 1-3 the bar will be significantly less.
  5. If, after the explosive movement the stock has a small pullback and begins to move in a small range in most cases, after this reveals, the action will go up.
  6. You should never enter a trade on the explosive vertical bar. Wait for that moment, when the action calms down and starts to consolidate. This will give you the best balance of risk to revord.
  7. This pattern indicates a strong upward momentum. Usually in this setup enter a market order for the offer, and leave the limit order is also on offer.
  8. Any flag and pennant end "LowerHigh". When trading this setup, you can easily fool yourself, confusing "LowerHigh" with another explosive movement.
  9. What do you expect from the next leg up? If the first explosive movement was 70C, you should expect at least 35S for the next explosive movement. But very often what happens is that the second movement is set to the first, or more.

Usually after a strong explosive movements, we see the pullback on low volume. As seen in the example above, we have setbacks in 10 cents. View, how much hit beam on these pullbacks. After cease to beat bidam, usually happens one of two things. Either sales will go back into bids. In this case, you can see, as a buyer gathers a lot of sellers in bids. Usually this will lead to the next explosive move up. In the second case, when the prints in the bids stop, other traders start to put bids above. Thus, they create a problem Byer, and he begins to move his big bid. If bids Baer and others are not filled, they start to buy the market for the offer. If the stock meets resistance during explosive movements is not a good sign.

  1. As soon as the flag is broken up, procuring.
  2. Put the best bid , if your bid is not filled and the stock begins to move up, buy at the market using a hot key. Slippage .05with a maximum of.
  3. If the stock does not move higher – above stepout bids and offers rise with them, the share price does not change, then sell half your position.
  1. Look at the tape, to understand, where you sell. If the action printout slightly below your entrance, then try to go for the offer.
  2. Sell half of your position, if the stock falls below the upper line of the flag.
  3. If the stock moves up after you bought it, be ready to buy on the breakout of the previous Haya. This is well illustrated by 1 minute chart.
  4. Buy only then, when the offer will come to Huy.

This blast pattern, and so the second movement should be fast enough. Get ready to sell, when traffic slows or stops. If the action is strong enough, you will not be difficult to sell at the offer.

  • If it is not possible to sell offer sell bidam.
  • The second explosive movement you should trade action, as well as the first explosive movement.
  • Look for consolidation.
  • On the first and second movement of consolidation similar?
  • The size of the rollback the same, as the previous rollback?
  • If there is an aggressive seller?

How do you find the vertex?

  1. The promotion may not penetrate the top after the second consolidation.
  2. What's it like moving down? If there is an obvious seller?
  3. The stock has fallen, below Haya last movement?

10. This plan is designed to give safe entry point in the action, that was the explosive movement.

11. You have to wait for the upward movement after the first consolidation. Also, you need to understand, what sales limition for the offer, easily doable.

12. Most intraday flags and pennants not konsolidiruyutsya for a long time. You have to be willing to buy at Khayam, if she does there is very little consolidation(less than 3 minutes, sometimes 1 min). The smaller consolidation, the more risk to enter a position.

Summary:

  1. Explosive movements.
  2. Small setbacks.
  3. Buy when the kickbacks punched.
  4. Buy more above the top point of the blow
  5. Come out if the second explosion is slow.
  6. Take profit, when the second movement slows or stops.
Learning stock trading on the NYSE, Nasdaq, Amex

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