LIBRARY : Intraday Mini FLow

To differentiate between dull move and reliable one we have to take help of 1) Volumes during 1st move 2) Angle of ascent

In Friday's case the move 1 had a steep angle of acsent but it had low volumes ( which picked in the afternoon session) to make things more confusing.Steep angle of ascent was showing that the 1st move (upmove is powerful) but it was missing our moving filter in aleast 2 bars.This angle of ascent was certainly too steep to call this move as a flag type corrective move. The low volume was giving the feel of a limping nature of 1st move. Both tests were pointing in different directions. There was no help from 15/20 min timeframes also.

We cannot design a system which will take care of all 100% occurances. If it takes care of 80 % ocurance, then it is doing a good job of handling various scenarios. Friday ,in my view was one such day where if you had shorted and added in the downmove (move no 2) it was ok,one could have reversed on subsequent break of PH and made the day as scratch day or slightly profitable day.

In such cases where the move 1 and move 2 little doubtful, we can consider applying moving filter to second move also,which could have kept us out of short trade and add. We could have gone long above PH ( in move 3 ,if you will) and ended the day with profit.Once pivots are established,it is pivots all the way.

There are no right or wrong actions on such days. We have to weigh the evidence we have about the moves,and take a trading decision and be alert to reverse it in case it proves to be incorrect.

Just put my thoughts which I was having while trading this move real time and reading various thoughtful posts on it EOD.

Best Wishes,

Smart_trade

You are absolutely correct ,arm, that 2 bars rule is to save us in case of V shaped reversals where pivots are far off.

After completion of 4 bars of HH,HL formation,we move our stop to the low of a bar 2 bars back (so 2nd bar in this case) -f . On 5th bar making a HH we can move our stops to low of 3rd bar -f ( without waiting for 5th bar to complete)

Best Wishes,

Smart_trade

DISCUSSION 2:THE WRB -HOW DO WE REACT TO IT?

The Intraday MiniFlow is a Today Only Flow.We have all kinds of bars that form in a trading day.One of the most exciting is the WRB.The WRB is a bar that is bigger than all the previous bars from a visual perspective.It is a bar that has its open near its lows and its close at or near its highs.How do we tackle this WRB?

There are 2 types of WRBs that we encounter on an intraday basis.

a.The Continuation WRB:We have our stops in place,we have had 2 or 3 up bars and then a WRB.If your stops were at LOD,or at previous pivots,move stops to the low of the WRB -filter.Simple as thatthe WRB is a good move in the direction of our trade.Negation of that WRB is enough for us to call it quits and reverse.A WRB in a continuation pattern can go on to make higher highs and lows as well,or it could be the heralding of the end of that move.We do not,as flow traders,want to get in between a good trade,and yet,we want to reverse if the latter scenario happensTherefore,stops to the low of the WRB - filters.

In a scenario,where the WRB is huge,rather a Monster WRBMove stops to the 33% mark of that massive WRB.This is calculated by calculating the difference between the Open and Close of that bar(not high and low) and divided by 3-filter(put a wider filter than usual).If this is hit,reverse.In a scenario,where the first bar is a bearish bar after the massive wrb,we now wait to see its action.If that 33% mark is hit,we reverse and go short.If that 33% is not hit,and it closes below the 50% mark of the previous WRB,raise stops to the low of that bearish candle- filter.If it hits,we reverse.Another scenario is that price moves huge,not triggerring the 33% mark,but goes below the 50% mark,note:we are waiting for its closeif that close is below the 50% mark,we do as above.If it isn't,we wait with our stops at the 33% mark.

Note:This above scenario is only when we get that monster wrb in a continuation move.A normal wrb continuation move,..we do nothing.We wait with raised stops at the low of the wrb.

b.The Breakout WRB:Once again,this is a WRB that breaks out of a consolidation or pullback past its previous pivot highs..same as above,once the WRB is completely formed,we raise our stops to the low of the WRB.Next we observe the next barif it closes below the 50% mark,we reverse below the low of that bearish bar.If it closes above the 50% mark,we wait with our stops below the low of the wrb.

Here again,if we get a monster WRB Breakout.we raise our stops to the 33% mark-wide filter.We wait for the following bar.If the bar closes above the 50% mark,we wait with our SAR at the 33% mark.If the bar closes below the 50% mark,we reverse below the low of that bar.

Note the differences between the continuation WRB and the breakout WRB..Please do ask your doubts and get it cleared up under the Ask Saint Section under the WRB thread.

All the best!
Saint