The "Flip" Trade (support and resistance changing roles)

[walterw]

Here are todays first 50 minutes of flip trades.... already made $100 for the day... (with this technique yet on virtual money) cheers Walter.


PD: I took off the 34 ema, less noise on chart.

[tradingkevin]

I agree with what you said above but I think it also depends on ones initial risk and the average swing size.

If you initial risk is 5 pts per contract and the average swings are between 15 to 20 pts then a 3x or 4 x risk is possible on your first target... now if your initial risk is 10 pts per contract then a 2x risk would be more appropriate for the first target...

[tradingkevin]

	Quote:	walterw
	Here are todays first 50 minutes of flip trades.... already made $100 for the day... (with this technique yet on virtual money) cheers Walter. PD: I took off the 34 ema, less noise on chart.

=======

Which way do you know to trade i.e. long or short ? is it based on the trendline ?

[walterw]

	Quote:	tradingkevin
	I agree with what you said above but I think it also depends on ones initial risk and the average swing size. If you initial risk is 5 pts per contract and the average swings are between 15 to 20 pts then a 3x or 4 x risk is possible on your first target... now if your initial risk is 10 pts per contract then a 2x risk would be more appropriate for the first target...

yes Kevin, 5 ticks could be the average stop on this time frame of 55 Ticks... taking a stop on a swing of the oposite failed pivot... so you would be looking as per your aproach for 15 to 20 ticks... well on russell you need momentum conditions for that kind of movement... if you have momentum, wich I use to read it on a 110 Tick chart with a keltner band 50 exp 3.5 atr, ( see example) being outside the outerbands (momentum conditions ) this 15 to 20 ticks target would perfectly apply....

if dont have this momentum condition (inside keltner), you will sit and wait for a move that is very unprobable.... so here we should have a diferent plan to take just a small scalp return.... we know statistically that the market will not travel 15 to 20 ticks on my favor.... so maybe taking 6 to 8 ticks will be a good exit... wich would represent a 1.5 RRR.... but you have there a nice overall performance of the flip technique....

So exits should be treated diferent depending on momentum conditioins...

any way your idea of taking a fixed target from a mathematical RRR point of view is valid, I think the RRR target should be adapted depending on the momentum conditions.... say x1.5 or x3 or x4 etc...

I atach 110 Tick climate detector chart... with keltner 50 exp 3.5 atr....

cheers Walter.

[walterw]

	Quote:	tradingkevin
	======= Which way do you know to trade i.e. long or short ? is it based on the trendline ?

Kevin, here I attach an excel explanation... tell me if you understand it... cheers Walter.

[walterw]

For the greedy lunch traders here we have the lunch coil been broken with a nice flip... the most tested level is the one in this case we take into acct...

cheers Walter.

[walterw]

Ok, here we have todays first hour flips... cheers Walter.



pd: I took of cci 6 ( more clean chart) and added +-50 lines to cci for posible timing usage...

[walterw]

I have a nuance to add here : when a level was previously tested twice or more, we can have a more solid flip in front.... cheers Walter.

[walterw]

So as the lunch Coil breaks (very common pattern ) we have a nice flip giving a very good competitive entry before the rally...

in this case the flip is inside the coil, in some other ocassion the flip happens outside the coil...

we must understand that there are two types of coil breaks pullbacks, inside and outside the coil (see example).... cheers Walter.

[walterw]

Today I decided to take some cofee and follow the session to its end and see if more flips will come in.... well a very nice came in, made me stop first but on the second atempt worked out perfectly well...