The "ABC" Trade

[walterw]

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.

[brownsfan019]

Walter - I'm beginning to think that you need to get into the business of writing possible trading strategies.

The band breakout/pullback is an interesting method. I never had much luck with bands - mainly Bollinger and Keltner - as I felt it was hard to really distinguish when to play the break and when to play the breakout. In other words, as price is approaching a band, do you play that it will bounce off or play that it will break through? With the indicator(s) that you have at the bottom of the chart, maybe that will help.

I attached some screenshots of your charts for consideration. I'm wondering if there's a way to filter some of these possible entries out that do not work.

Also, in the spirit of the forum, I think it would be good if you highlight trades that failed as well. Please don't misinterrupt this comment, but from some of the charts that you post, it appears that you are developing bullet proof strategies daily. Obviously that's not true, so it would probably be helpful to everyone, incl yourself, to point out areas of failure as well to get a full picture. Just a suggestion. I find that it's easy to look thru rose colored glasses when it's your hard work and ego on the line.

[walterw]

Yes Brown posting my trading method helps me a lot, and I know some good people like to clear their ideas watching this posts, thanks for interacting, about stops being posted, you can check on the "flip" thread and you will see all good and bad trades being posted... same will happen on this thread, I will post all trades, good and bad ones...

I respond to your questions in the charts .... thanks Walter.

[brownsfan019]

Walter - how do you define the 'already had a huge move' and how do you categorize when to keep taking the trades? Obviously on a nice trend day, you'd want to take them all day. Other days not so much.

[walterw]

	Quote:	brownsfan019
	Walter - how do you define the 'already had a huge move' and how do you categorize when to keep taking the trades? Obviously on a nice trend day, you'd want to take them all day. Other days not so much.

Well thats where greed control comes into play... that type of days where you had a long travel outside the bands and then make a new super move outside the bands again.. dont happen very regularly... so being controled its a very good way to not get catched on greed thinking that on that second set it will happen again, because statistically we know it want... when it happens, money on the table ? let it happen... its not my bussiness any more...

Remeber always this : Momentum is the exception, Cycle its the rule...

you can take abc`s on the first break and done... mostly on the second you will have a false abc setup followed by a "lazy" trade... on this second sets of abc`s its where I will be monitoring for Lazy trades, wich normally happen... cheers Walter.

[walterw]

Ok, two great abc trades today... momentum was clear at a strong A break... cheers Walter.

[mkp14]

Hi Walterw
Here is chart for ABC with T1@ 127.2 OR 100% Entry@ breakout of
38.2 or top of c
mkp14

[walterw]

Mkp : you can find lots of ABC on the market, based on fibs, elliot waves, etc etc... now my abc`s are very specific in terms of "area" ... I want to see that happen outside the outerbands, because normally thats the place where momentum shows its face... cheers Walter.

[mkp14]

Hi Walterw
What is setting of outer and inner Band ? It is good because we can fillter bad trade set up. I like ABC Setup near all ema and also comformed by 5014 or 5034z
Thx
mkp14

[walterw]

	Quote:	mkp14
	Hi Walterw What is setting of outer and inner Band ? It is good because we can fillter bad trade set up. I like ABC Setup near all ema and also comformed by 5014 or 5034z Thx mkp14

I am using a 55T chart of YM... with keltner exponential 100 / 1 and 2.5 atr

below you have a CCi 14 and 6... very simple chart...

Momentum its the key here... cheers Walter.