Hope some of you are going deeper into the Flow and might be having some doubts on How this Pivots are used to Generate the "BUY ABOVE" and "SELL BELOW" signals. Those who have gone through the SAINT's FLOW method would understand. If you have not understood I will try to explain (Not going too much into the FLOW method but by using the Pivots formed in our FLOW chart).
Please see the FLOW chart attached. (I have slightly modifed the EMA from 10 to 3.5 to get this chart). I have mentioned howto modify the EMA in my previous post.
On Friday the market opened around 5369 and previous day pivot (See REnko chart) was
BUY ABOVE - 5382.
SELL BELOW - 5357.
Market Opened at 5369.
For First trading opportunity the PivotLow(PL) is 5357 and Pivot High is (PH) 5382...
Always remember to take positions only LONG Above PH and SHORT below PL
1. When market crossed 5382 around 9:35, We could have gone LONG Keeping the PL (5357) as the stoploss (OR Whatver is your minimum stoploss)
2. So there is LONG positions open now
3. Market made a High 5399.
4. Market made a low 5391. (at this point the previous high of 5399 becomes a Pivot High)
5. Then made a high of 5396. At this point the previous low becomes a Pivot Low.
6. So when new Pivot Highs and Pivot Lows are made we have to adjust our stoploss points. In this case our stoploss would be shifted to 5391 the new Pivot Low....
7. And when the NIFTY made a Pivot low 5389 (L2), your stoploss (GAIN) would have triggered and your LONG position would have closed with a profit of 7 points.
8. Once you Quit your Long position, now you are looking for fresh opportunities.
9. Now the recommendation as per the pivot is BUY Above 5396 (H2) and Sell Below (5389). When market is trading in a such a close range (the gap should be at least twice the Renko Block size) , you would always apply some filter. Say I would put a filter of 4 points (our Renko block size) and modify my Recommendation to
BUY ABOVE 5400 (H2+4)
SELL BELOW 5385 (L2-4)
10. At H3, No Long Call triggered. Change your BUY ABOVE to H3+4, ie 5398
11. At L3, No Short Triggered
12. After L3, I would change my BUY Above to 5394 because the between L3 and H3 there is 8 points.
13. LONG Gets triggered once again above 5394 stoploss is 5386.
14. Market makes a high of 5400. and also Makes the High of the DAY and reverses.
15. Our Stoploss (LOSS) gets triggered at 5386. You make a loss of 8 points.
16. When you a make a loss at 5386, you should also REverse the positions and you will now GO Short below 5386.
17. Market made a low of 5342. Depending on your First Target you would have possibly booked 50% at 5361.
18. You are carrying another 50% positions...
19. Market Reverses and makes PH of 5363 and Pl of 5355...
20. Between L5 and H6, your outlook changes to LONG above 5363 and so you will close the rest of the short positions at 5363 and you ca GO LONG once again above 5363 or you can stop for the day... Hope you understand...
Remember we are not taking any positions at H4 or L4.
Buy Low and Sell High is literally not possible. We only trade after we confirm the Trend and we trade with the Trend and the Flow..
To Summarise our opening and closing positions...
1. LONG above Previous Day PH of 5382.
2. CLOSE LONG 100% at PL (L2) - Stoploss hit
3. GO LONG once again above H3.
4. CLOSE LONG with loss below L3 - Stoploss hit
5. Open SHORT positions below L3.
6. Close 50% SHORT on the way to L4.
7. Close the Rest of Short Positions above H5. - Stoploss Hit
8. So like this Flow goes on and On...
NOTE: For the Recommendations I have used the Pivot Lows (SELL BELOW) and Pivot HIGHs (BUY ABOVE). I have just done one improvisation there, which is instead of taking jsut one pivot point, I have taken the two most recent pivot lows and highs and drawn a "BUY ABOVE" line and "SELL BELOW" line. That is the reason sometimes you see a slanting line and not a Straight horizontal line
