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The "ABC" Trade
I want to start this thread about a technique I also developed somehow together with "flip"... its an old method, nothing new here, just old wisdom being organized in an easy to read method...
Also I will open a new thread of a third and last method I am using in futures at this time wich happen to be a new edition of my old M trades... (This threads have nothing to do with what I am researching in forex, this is about my futures trading)..
What happened its that I find a lot of good trades going on that could not be taken as they where not with the flip morfology and I noticed they would go with the same "spirit of momentum" we developed on flip...
So let me recap on this momentum thing just a minute here so you can understand what I am talking about here...
If you look at the first image I attach, you will see that I define momentum as the centrifugal action outside the outerbands... thats what we are looking for ... we want to trade this centrifugal movements that the market sometimes can do with great enthusiasm...
Now ABC ( I got inspired in the name since Dogpile mentioned it here on TL, thanks Dogpile, I dont know if it has something to do with what Dogpile its doing) but its an ABC pattern what we will trade here...
On the second graph I try to make clear what the "ABC" trade its all about...
A : We have a very strong move outside the outerbands
B : We make a small Pullback
C : We continue the move with mometum
Easy stuff here... no brainer, if the market its showing his paws (specially on the first hour) and the wave A its constructed with energy... we can expect after this small pullback to see more action in the same direction...
Here we are measuring momentum on the A wave... the stronger the A wave, the more we can expect on this trade...
B is the "oportunity" being setup for us to enter this strong market...
C is our bussiness... The continuation of the momentum...
Now I borrowed from "flip" all the timing methods being used... CCI 100,50, 0 levels crosses, stops and exits aproaches,etc.. all adapted to ABC trades, so for those that are familiar with how we are managing timing in flips, they will find very easy to adapt those timing methods to the ABC trade...
For last I attach some examples of ABC trades... I will be posting examples on sessions ahead....
Timing criterias at this time : (using cci, same inputs as "flip")
For entries, if we have a zlr type entry, I will enter with the turbo 0 line cross... if I have a regular entry I will do it on the 50 levels cross..
In terms of exits I am only taking one exit (no runners)on the 50 levels re-cross...
Should I make clear nothing its perfect and stops also are expected here, wich I take them 2 ticks above/below entry pivot...
Hope you enjoy this very simple method as I am doing... cheers Walter.
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