- Kapitan Kidlat
This is one of the more profound lessons from one of our mentors. Such a simple statement but many traders seem to neglect.
In the process of fine tuning my system, I tried to enter one of my favorite setups. A flag or pennant pattern. This is when a stock made a very big move then consolidated at the highs. After consolidation, it can only go in two directions, up or down. Now it is up to the trader or their system to determine where it is going.
Let's take a look at the last two that my system has 'flagged'. The blue circle was the entry point. The red circle the exit.
LIB - This entered my system since it seemed to be consolidating at the highs. In hindsight, the highs that I determined wasn't really that high. It seemed to be at the lower end of the spectrum. Once it broke down the MAs, I had no choice but to cutloss. Even causing a breakdown.
MIC - After the disaster of LIB, MIC then entered my system as another potential candidate of an easy trade. Now this time, it fits all the parameters of consolidating at the highs. After a couple days of holding it broke out an made another flag. Then made another consolidation at the highs. Where will it go from there? We shall see in the coming days.
Thanks for this share Sir.
ReplyDeleteBy the way, as I see greater possibility of winning trade of this flag pattern is to enter when it breaks out the flag pattern.
Just my thoughts sir.
Thanks.
Hi Jay-ar. Yes you are correct, greater possibility of winning is when it breaks out. This was done when I was still fine tuning my system. :)
DeleteI tried looking for the stock LIB pero wala na. I'm still in mutual funds back in 2015. What made you buy at that level? It's still within consolidation. Looking at the stock from what is shown, the stock respects body breakouts so the wicks are not important, I think. Even so, it's still within the consolidation.
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