As desired by many newcomers to this thread, I have inserted/modified Various Saint's posts to give a consolidated idea and posting the same.
If anything wrong in my understanding, kindly point out to correct it.
The 60min Trend Trade::Very simple........we trade the 60min chart only.No perspective charts here.No looking at trends on higher time frames.We buy previous pivot highs on the 60,we hold,and we exit once previous pivot lows are broken,and we go short,We hold,and then cover and go long once previous pivot highs are taken out.It's an always-in-the-trade type of trade.............There is no analysis here,no thinking,just going with the flow up and down.......the only work done is position sizing,maybe adding to positions,one keeps one's mind away from opinionating about the larger time frames........One just doesn't care anymore.A larger time frame crash will involve you into it,a euphoric rise up will have you in it,the frustrating sideways will probably get you in and out a few times but would be reduced if stops are placed in the right zones.........
As said before,one therefore just goes with the Flow...........things are kept very simple.I go long because the previous 60min pivot high is taken out,I exit and go short because the previous pivot lows are taken out,and vice versa.
Trade Smaller and Longer is the way out here.........I have a stop at previous pivot lows and stop is Rs60 away......I do my Position Sizing,and Rs12k is the risk I am prepared to take,therefore I buy 200,or 4NF lots.However juicy and yummy that pattern may be,I am getting in with 4 lots because my Trading Plan says so.
Add's as always at newer pivot highs with stops raised to latest pivot lows.....think it's a bit boring to repeat all of this......
To reiterate once more:
TIME FRAME:60MIN
PERSPECTIVE CHART:None
ENTRY:When the latest pivot high is taken out,enter long.When the latest pivot low is taken out,enter short.
Reverse(EXIT):
a)Normal
If initial stop is taken out.........If previous pivot lows in an uptrend are taken out,exit longs and go short.If previous pivot highs are taken out in a dntrend,exit shorts and go long.
b) vertical,steep-ish bars
When charts get vertical,steep-ish gradient,put stops at previous 2 bar low,exit long and go short if triggerred..........No steep gradient,no using this method,then it's pivots all the way.
c) VISUAL GAP:
What is this nonsense?A gap is a gap is a gap.......Yes,again,my way of telling: Don't micro manage.Don't try to measure the gap...2% or 5%(we believe in exacts,Saint......by visual,you mean 2% or 1%....no ,no,go by the eye,I say.......aw c'mon,Saint...too vague,subjective.....we believe in precision,backtesting,mechanising,etc.......you believe in the EYE ???!!!)
A visual gap is a gap that is obvious on the 60min chart,either by zooming out the chart or by visualisng it across the room.....Apologies for this in the present technofancy world we live in......I believe in the magic of trading,the art,the beauty.....not the dry scientific putting in numbers,and getting some lines and arrows......and Buy/Sell signals.
Thought it best to define me.....so that the next time,someone asks me about the science,.....the dry arid logic,.............cold,hard,facts.....the response would be zilch.Apologies in advance
Gaps in the direction of the preexisting trend
1.We are long a trade,day 1,2,3,4.......big moves on the 60......trade gets vertical.....wrb's one after another....market shuts and opens with a big visual gap up.Allow the 1st bar to form,put your stop below that bar (with a bit extra) and reverse to short when triggerred.
2.Same as 1 for shorts.
3.All other gaps in the direction of the trend......nothing to be done.Once the day progresses and pivots form,the latest pivot low can become the new recent stop and reverse point.
So long as gaps are in the direction of the trend.........nothing except in case 1 to be done about it.Treat it as if it were a strong move up if that makes you feel better.But when the NIFTY gaps up 150pts,we ache to put that 50-60k in the pocket.And then we mess it up trying to get in lower and give back half or more.Stick to the plan........We want as much of the meat as possible out of that trend move.And in that,we are willing to leave a lot on the table.
The question you have to ask is:Can you do it?Do you have the stomach and capital and mental fortitude to pull it off?If the answer is yes,.....great.If the answer is no,.....are you sure that the method is faulty.Or is the fault in the organ between the two ears?
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Gaps in the reverse direction of the preexisting trend
Long trade
reexisting trend is up....Visual gap down.Is it below the previous pivot low on the 60?If yes,short the low of the first bar.If no,hold and see if pivots crack.Exit longs and go short.
Vice versa for short trades.
Broadly.....always a hundred different possibilities,but broadly.
Move stops up only on 3 conditions:
a.NF moves to new highs.
b.That first move down after that first bar up of today if it had shown a more marked fall than this miniscule,practically sideways move......followed by a move up back to these levels and then that hypothetical LOD gets counted as a valid stop.
c.NF goes sideways and much,much longer than this......and then breaks down
ADD:Add to longs only if newer pivot highs are made in an uptrend.....Add to shorts only when newer pivot lows are made in a downtrend.Every down/up bar is also an opportunity to add.This depends on the chart and the way it makes its moves.For example:ABAN is an example of a chart where each up or down bar is an opportunity to add.
PROFIT TAKING:NONE......no profit taking as far as I am concerned.But do take profits off the table if you can't sleep nights and picking on your wife..........Profits therefore only for preservation of sanity.
POSITION SIZING:Very simplistic and rudimentary form,but it still has kept me out of harm's way..........already discussed in the "Teach a Man to...."thread.Entry is at point x........Stops are 60 points off.I take my capital,and risk only 0.5% of it ,say it's 12k.........divide 12k by 60 NF pts,you get 200 shares,or 4 nf lots.Therefore whatever happens,go long with 4 lots only.
One more add:Say we entered with 4 NF lots long,and added another 6 along the way,all the while raising stops,we hold all 10,we get pivots taken out or 2 bar rule in a vertical move violated,then calculate from that pivot high to entry point(for ease of calculations,presuming it's 60pts away,therefore you need to short 4 lots).........so we sell 14 lots,therefore exitting all 10 longs and entering 4 shorts......Apologies for multiple reiterations.
MINDSET:A mind that is simple........devoid of too many if's and but's and why's and why not's......a mind that refuses to get swayed by larger time frames,CNBC,other traders,gossip,rumours,etc............a mind that dares to stick to strategy and plan and in doing so stays in the present and is not swayed by a euphoric rise or a precipitous fall,thereby leaping over the Fear-Greed Barrier..........A mind that stays in the Now,removing the "I" from the trade........A mind that goes with the Flow......in this case the 60min Flow.
What to do Near Expiry.
Gaps in the reverse direction of the preexisting trend
Long trade
reexisting trend is up....Visual gap down.Is it below the previous pivot low on the 60?If yes,short the low of the first bar.If no,hold and see if pivots crack.Exit longs and go short.
Vice versa for short trades.
Broadly.....always a hundred different possibilities,but broadly.
reasons for seeing 30Min TimeFrame
The 60min chart is what we trade......the 30min chart comes in only when we get a vertical move down/up with no pivots,gap dn/up or sideways moves ,as in 2-3 bars on the 60.......then only do we hunt for Pivots on the 30.
Satya,as you keep trading,you will come across the 2 worst enemies of the Flow Trader.........we have all met Enemy 1--GAPS---and we have formulated a few methods to manage that Foe.For example,even if the gap is way against us,we would still wait for that first bar to get taken out...Else we are holding and probably adding.Another example is a Gap below Pivot and we are reversing and probably capitalising if that first bar is taken out.....so on so forth.
Now,enter ENEMY 2----the V-PATTERN----if you were to trade the 60min charts only,you will come face to face with this one.......For a Flow Trader who needs Pivots to Reverse,this Pattern is a killer.Imagine a superb downtrend,we are in short and then comes a crash in NIFTY(like Jan2008).Imagine you are hard core on the 60min Flow without the 30min modification.......you get a vertical fall and you get a vertical rise,forget the fact that you have given back all your gains,worse,the pivots don't just come and when in frustration you turn to longs,the market dumps!!It is the 30min tweak that made that day one of the best days in trading this year and it's a great weapon to have in your armoury.We already have the 2 bar reversal method for vertical moves..........but nothing beats the conviction that a pivot can give us,therefore the need to drop a time frame.....NIFTY especially can move in big moves when trending and the 60min will hardly give you a pivot,and that can be painful..........not asking you to change the way you do things,but asking you to examine the use of a slightly lower time frame,....not always,but at certain key moments.
Ideal scenarios do work in ideal conditions........but the market tends to throw up more than ideal conditions and one has to deal with it.Therefore these various modifications to a method,like the 30min modification to the 60min Flow.........it is to be used only in a scenario of gaps,or vertical moves,or sideways moves when you need more clarity,and not to be used on a minute to minute basis.
Are you wrong in holding the 60min Flow short overnight......not at all.....are you deviating away from the basic content of this thread.....not at all.What you are doing is very much part of this thread.
What I consider as deviation is when one group tries to prove the other wrong and adamant to get their ways.......Both groups within this thread have to understand that they are both correct.And be happy about it. ....But the general method of this thread will continue as a 60min Flow with a 30min adjustment.Because that's what I am doing.......
Importantly,if you are trading only the 60min Flow ,stick to that.....Yes,you had no reason then to get long,and you would have reversed and gone long today......great.What you have to figure out over time is how you are going to manage that vertical fall and rise maximising gains and reverting in time,without dropping a time frame...........Homework for the weekend.
