The "Flip" Trade (support and resistance changing roles)

[Z_trade 10]

Looking for the simple way to make an exit as clearly defined as possible, I am testing the Parabolic SAR with default setting. The option that it can be easily incorporated into trading software as a trailing exit/stop gives the choice of *set the trade and go away*.

 

On the chart below, the red dots are Parabolic SAR (0.02, 0.2). The entry was obvious after the market showed the potential momentum to the upside; restatement inside the outer bands to the KC (100,1) and CCI cross -100 from the below. The red arrows demonstrate the difference between exits by the CCI +100 cross and the SAR stop.

[walterw 10]

Looking for the simple way to make an exit as clearly defined as possible, I am testing the Parabolic SAR with default setting. The option that it can be easily incorporated into trading software as a trailing exit/stop gives the choice of *set the trade and go away*.

 

On the chart below, the red dots are Parabolic SAR (0.02, 0.2). The entry was obvious after the market showed the potential momentum to the upside; restatement inside the outer bands to the KC (100,1) and CCI cross -100 from the below. The red arrows demonstrate the difference between exits by the CCI +100 cross and the SAR stop.

 

 

Interesting... it would deserve some analisis, would you exit the entire position there ?

[Don4 10]

Hey walter,ive been trying to figure something out with money management too. The 50/50 scaling out works really good when u catch a big move but when u lose 2 to 3 in a row plus commission it really starts to add up,so scailing in maybe would take the sting out of that string of losers. here is what ive been doing, instead of putting the whole position in at first only use half and make sure that the trade is at least going in your favor,if you lose that trade no big deal because u only risked half of it anyway,it would auctually give 2 chances compared 1 to hit that super runner. If the trade does go in your favor exit the scalper position (lock in some profit) then add the super runner. At least you know that momentum is somewhat on your side.

[Z_trade 10]

Interesting... it would deserve some analisis, would you exit the entire position there ?

 

well, the idea of using Parabolic SAR comes from one of the trading books that describes trade setup based on bunch of moving averages crossovers and an SAR as a filter and stop signal.

 

To answer your question, I don’t really know the answer yet, as I just began the research, but I always have mental problem with exists, so I m trying to implement some sort of mechanical way to close the trade.

Usually, in your *flip* trade setup I would partially close on the out of range extreme $tick reading or a couple of ticks below/high previously significant high/resistance or low/support level

[walterw 10]

Hey walter,ive been trying to figure something out with money management too. The 50/50 scaling out works really good when u catch a big move but when u lose 2 to 3 in a row plus commission it really starts to add up,so scailing in maybe would take the sting out of that string of losers. here is what ive been doing, instead of putting the whole position in at first only use half and make sure that the trade is at least going in your favor,if you lose that trade no big deal because u only risked half of it anyway,it would auctually give 2 chances compared 1 to hit that super runner. If the trade does go in your favor exit the scalper position (lock in some profit) then add the super runner. At least you know that momentum is somewhat on your side.

 

That would open a new dimension to the entry timing... should you consider a 2nd timing entry criteria there ? what would that exactly be... ? in terms of math makes sense... the technicall aspect is the hard one there...

[walterw 10]

well, the idea of using Parabolic SAR comes from one of the trading books that describes trade setup based on bunch of moving averages crossovers and an SAR as a filter and stop signal.

 

To answer your question, I don’t really know the answer yet, as I just began the research, but I always have mental problem with exists, so I m trying to implement some sort of mechanical way to close the trade.

Usually, in your *flip* trade setup I would partially close on the out of range extreme $tick reading or a couple of ticks below/high previously significant high/resistance or low/support level

 

 

Z Trade : yes exits its a hard arena, did you notice that when flip was born here there wasnt much on exits... but keeping things as simple as posible should be the target, thats what I did with cci... it gives you a very straight forward exit rule, thought some times its not the best...

 

But when you try a new indicator you will find that on some trades he will outperform cci and on others cci will outperform him chatterbox so.... it can become frustrating this indicator stuff... whats important here its the overall concept of momentum where there are more chances to have a succesfull trade...

 

About the white keltner as a level thats about the topic I was going to open on a new thread... taking that level as a very comon level to take " momentum flips"... I must confess there is a 22 Tick chart I also use for (very specific timing ) and never posted to keep this thread simple and dont confuse anybody... but on those charts you can see this white (intrabands) working like a charm... cheers Walter.

[walterw 10]

I dont trade so late on a session, I normally use to trade on the first hour of session, but since flip I am following the entire session...

 

Notice this last flip on ym as the session is finishing... cheers Walter.

[Don4 10]

That would open a new dimension to the entry timing... should you consider a 2nd timing entry criteria there ? what would that exactly be... ? in terms of math makes sense... the technicall aspect is the hard one there...

 

 

Yea i know what your saying, I dont want to take something simple to use and make it difficult! But im only trying to capitalize on some of these huge moves in forex. My entry would be the same (just a little less risk at first) my exit will be the same (super runner). Just for instance i took a trade 7 hours earlier with a 7 pip stop, its still running. That pretty amazing in itsself. The longer it stays above the better chance i have of hitting a pretty good move.

I like playing probabilitys, 1 pair 1 setup and trade it everytime i see it. But ive been wrong many times before. And I know the win% wouldnt be anything to brag about but the RR would be awsome:) Whats your thoughts?

[walterw 10]

Yea i know what your saying, I dont want to take something simple to use and make it difficult! But im only trying to capitalize on some of these huge moves in forex. My entry would be the same (just a little less risk at first) my exit will be the same (super runner). Just for instance i took a trade 7 hours earlier with a 7 pip stop, its still running. That pretty amazing in itsself. The longer it stays above the better chance i have of hitting a pretty good move.

I like playing probabilitys, 1 pair 1 setup and trade it everytime i see it. But ive been wrong many times before. And I know the win% wouldnt be anything to brag about but the RR would be awsome:) Whats your thoughts?

 

Don : can you explain me exactly whats your idea on a chart... I dont know if I really did interpret you correct...

 

So far I understand you would open at normal entry half position, if it goes ok you would exit at scalper exit that half, what I dont get clear yet its where exactly would be your entrance for the second half... nice money magement ideas here... I also understand that the momentum will be your key for success here... in terms of super runners...

[Don4 10]

Don : can you explain me exactly whats your idea on a chart... I dont know if I really did interpret you correct...

 

So far I understand you would open at normal entry half position, if it goes ok you would exit at scalper exit that half, what I dont get clear yet its where exactly would be your entrance for the second half... nice money magement ideas here... I also understand that the momentum will be your key for success here... in terms of super runners...

 

Walter, right now i have so many ideas running through my head,I know it has to be kept simple,momentum would be the main key, but staying power would be another(above support,below resistance). Ill have to go back and look at some charts and ponder on it a bit .But yea the tricky part is going to be entry of the second half. I guess the main concern is protecting the profits of the first position whether its scalper exit or zero cross of the cci.

if price starts to retrace back and finds some support you could reenter at the exact price that you exited your first position as long as it was out side the white band.(Limit order or what ever)If your order is triggerd you know that momentum is still on your side(not that its a garentee) These are just some ideas,ill try to post some charts in the morning.

[walterw 10]

Today Ym delivered a very nice momentum flip... notice the pivot formed outside the outerbands how it calls for momentum.... cheers Walter.

[walterw 10]

Here is another set of flips... always coming out of this outerband pivot...

 

Now on this ocation the scalper was the most rentable here... and there is certain discretionary aspect as to the time of the day where we know the market may not build up that much momentum... at this time of the day it would be better to close entire position at scalper exit...

 

The last trade shows how agresive it can be to take a trade as momentum may alsready be stalling... cheers Walter.

[walterw 10]

The last flips of the session for YM.... there where some momentum situations where we could had taken some far flips.... I didnt take them with this method but papertraded on my beta...

 

My entry on 100 levvel made me swet a little, I admit I had to take a stop there, but was positive that the trade was going to work... in that case crossing 0 would be more conservative for timing entry...

 

Today was a hell nice flip trading day...

 

I am also making a beta flip on a 22 T chart of YM, it rocks (only for very short moves scalpers), will soon post... cheers Walter.

[Don4 10]

You had some very nice flips today,Walter.

[walterw 10]

You had some very nice flips today,Walter.

 

 

jjejej yeah... I must confess that the one on the second chart made me swet... I took it as a "far flip" on the first re-cross of +100... man he just went against me and I did not stop it... What I am thinking is to consider an M there for timing the swing of the internal M pivot OR move my entire timing entry to 50 levels (think its the easier and yet better timing than 0)...

 

How was forex Don ? any flip there ? ...

 

Z trade : are you trading YM ?

 

cheers Walter.

[Don4 10]

Yea, I one earlier today and took about 8 pips. But was just stopped out on another.

 

 

 

[walterw 10]

Not bad Don...

 

My inputs here : 1rts you could exit with some profit on the scalper exit re-cross of -100 and 2nd using the +50 level exit for your runner would be an "ultimate stop" with cci crossing against you on the +50 level...

 

I asume you used the S&R level for stop... wich is ok but pretty far...

 

I see you could had taken a previous flip there with a zlr type timing... did you see it ? good work Don... tell me your inputs on this...

 

I think that the exit rules should be fixed... some times they will outperform other aproaches as its true other aproaches on diferent ocations will outperform your original... the mambo starts when there is no fixed exit method...

 

I am coming to the conclusion of using for myself a more hard/non flexible exit rules... they sometimes work like a charm other times not so nice... but on the overall experience I think the stress doesnt come from not having the desired output but worst from not having more strict rules... it creates a sensation of insecurity... and starts a futile and non ending journey to that holly grail that maybe I already have... do you have this sensations like I have ?

 

For me as for many others EXITS topics sucks... probably sticking to an average performing rule can change that nightmare... tell me your thougts Don.. cheers Walter.

[Don4 10]

Yea, I believe a strict set of rules is a must (for me anyway) without rules you will always be searching. No two traders see the same. Consistancy is the key. I always try to focus long term (But sometimes that can be very difficult) I believe i hold most of the answers to my success but just havent put it all together yet. But then again how many times have i thought i was right before:confused:

[walterw 10]

Yes, its very important to find that sweet point of feeling confortable with your aproach and at the same time having a good sound aproach.... sometimes we can feel confortable with something that really its not the best at the end of the tunel... nice to interact about this topic... its not easy but having this type of topic totally under control I believe its the holly grail.. cheers Walter.

[Z_trade 10]

On eSignal chart I put all the setting Walter using. The sub window is a Woodie CCI bottom indicators set. The flip trade to the downside with 1/2 exit on the -100 cross and the other 1/2 on the 0.

 

For some reason my Tradestation chart I m using for trading looks different. Keltner channel, I would say, more accurate even though the calculation is the same. The retracement goes inside the inner band, but tradestation shows clear outside momentum.

 

 

Have a good Flip trades, Ztrade

[walterw 10]

Hi Ztrade : have you considered for this zlr type entries, using the turbo (6 cci ) 0 line cross for timing ? some times zlr can get dificult to read... that turbo 0 line cross could be of some confirmation... nice trade Ztrade...

 

about the keltners, maybe one is simple and the other exponential... cheers Walter.

[walterw 10]

So far today we had a cycle market until we made a very srong break of resistance... then a "far flip" was there... two more agresive flips also worked out fine with the scalper exit, as momentum did not build runners today did not profit...

 

Looking at Ztrade chart I liked to experiment a little help for zlr type entry using a turbo (cci 6) crossing 0 line....

 

Entries at -50 outperformed the ones at -100...

 

cheers Walter.

[walterw 10]

Let me add here some consideration about the ideal "flip"...entry, the one that its perfectly constructed...

 

The ideal "flip" is the one that :

 

_First, makes a pivot on the outerbands levels creating an S&R level...

 

_Second, it breaks that S&R level...

 

_Third, it pullbacks to the S&R level and tests the level... (without getting much far inside the level)

 

_Fourth, it bounces off the level making a "flip"...

[walterw 10]

Ok, on previous post I refreshed the concept of a perfect pitch "flip" ...

 

Remember this : I consider it perfect when it tests the level and it doesnt get much inside the level...

 

 

Now I want to introduce how I do my "very specific" timing on a 22 Tick chart...

 

I only aplly it if I have an "ideal flip" otherwise timing is done on the 55T chart as posted so far...

 

The idea of using this specific timing its really to have a very accurate entry and a very accurate scalper exit... runner exits are timed on the 55 Tick chart.

 

The indicators on the YM 22T chart are as follow: keltner 250 exponential 1.6 /4 atr , Least square mov average 25 and the oscillator is an Ergodic TSI 3/3/3/2 with levels +-60...

 

The keltners are exactly the same as you can see on the 55Tick chart...

 

"Very Specific" Timing entry for a short (example) is done when ergodic crosses down +60 level .... and "Very Specific" scalper exit is done when price bars cross the 25 lsma...

 

Stop criteria would be a premature cross of the lsma against position...

 

In the example below I closed the entire position on scalper exit as we are on lunch time and not much momentum is expected... I expect all your comments... cheers Walter.

 

PD: Setup is monitored on the 55T chart, IF I have a perfect flip setup, when time comes to enter position and timing entry... then I watch the 22 T chart.

[walterw 10]

OK I went wild today with flips... ¡¡ look at this flips... I attach timing with 55 T and also on 22 T.... Evolution can some times be fast... I added the 0 line to ergodic oscillator on 22 T chart for timing puposes (experimental)... crossing 0 would signal a more robust entry and re-cross would signal a quite competitive scalper exit... even as they are not perfect flips... 22T timing did a very decent job... cheers Walter.