IDF – Intra Day Flow
Disclaimer: The below mentioned write-up is an attempt to derive a workable understanding from a relatively complex system IDF, its only for beginners like me to atleast have some grasp of the concept. I know I might have made multiple mistakes in interpretation or comprehension,Dear Subhadeep and other seniors can help to correct them.
Some important terms, phrases and common diligence related to concept:
Intraday - as we liquidate all our positions intraday
Flow- flowing with trend till it exhausts and changing direction when trend changes.
Perspective chart 15min.
Trading chart 5min.
It is a
price action strategy.
Any indicators: none
Applicable: only in strong trends
Stay out in sideways, Flags, wide range opening bars - one gets tossed around both ways if you follow this strategy in such a market.
No catching of tops and bottoms- being trend traders we can't hope to catch the extremes, just be a part of an existing trend till it exhausts.
Concept of ERL: early reversal line (post#223, page23, this thread, on how to draw it) is basically meant to alert and get you out of a trend (and position) just when it starts to reverse and taking a counter position after the counter trend is established.
A word of caution: in the beginning counter trends should best be avoided (as the counter move may be limited), and better to take with the trend reentries if they arrive. Trends can last longer than most traders expect.
Breakdowns are always more dependable than breakouts.
A bear is a bear (as Subhadeep once put it) : we should be more aggressive in adds in a bear than a bull.(rjshem once said)
As with all price action strategies the
quality of set up is important, for e.g. a long over a pivot composed of dojis without any good bodied bull bar is a suspect set up which may fail and give a trade in other direction
Entry : at the break of yesterday's visual pivot, minor pivot (will be elucidated further in detail with chart examples)
When we enter in the direction of yesterday's trend our rules are relatively liberal (we enter at the break of yesterday's minor pivot), because it is perceived as a continuation of yesterday's trend, we enter early.
When we enter against the direction of yesterday's trend we are more cautious and look for break of more dependable visual pivot .
Adds: at minor pivots, 2 or at the most 3adds (Smart_trade)
Exit : break of mpl if long or break of mph when short or a known support/resistance.
Yesterday's visual trend/range: the visual trend/range of yesterday's last trading session (tentatively 1:30 to 3:30)
Open Gap up/ gap down in yesterday's range - quoting ST's post that explained this (crystal
Opens gap down/ gap up in yesterday's afternoon range.
Let us say market is in uptrend,then in the afternoon the upmove accelerates and market closes at or near the high of the day.Next day the market opens gap down in earlier day's (meaning today's) afternoon range.
Smart_trade
......,........,
Visual Sideways: easier to see in 15min chart (price moving in range)
Visual pivots: easier to see in 15min chart ( every minor pivot in 15min chart is a visual pivot)
I am intentionally leaving the erl based entries for the time being to keep it simple. Instead I include the visual pivot enteries( a more stricter condition) where erl is part of entry condition. So we are not concerned whether price opened above or below erl as we are entering on visual pivot break.
All the conditions enumerated below are for
opening trade .
Yesterday visual up and price open in range , we go long at the break of yesterday's minor pivot high mph (consider it as a trend continuation)
Yesterday visual up price opens gap up above VPH we go long over today's minor pivot formed over today's first bar (this guards you in case a gap opening is followed by gap filling)
Yesterday visual down and price open in range , we go short at the break of yesterday's minor pivot low.(consider it as a trend continuation)
Yesterday visual down price opens gap down below VPL we go SHORT below today's minor pivot low formed below today's first bar (this guards you in case a gap opening is followed by gap filling)
Yesterday's sideways today open in range, wait for a 5min candle to close outside the range that is above or below it, then go long or short accordingly above or below that candle.
Yesterday's sideways today open gap up above vph, go long over minor pivot high formed over first bar.
Yesterday's sideways today open gap down below VPL, go short below minor pivot low formed below first bar.
To be continued: Atleast two opening conditions are missing, till i find good charts to describe them.
thanks
regards to Subhadeep and all my seniors
Vivek