The US Federal reserve is meeting soon. Guy said not to trade during this time. I just wanted to know why and what the problems could be of doing so?
Trading flags and consolidations is a technical trading method.
We don’t want a major news event to destabilise our method, so the safest thing to do is to sit tight while big announcements, such as Earnings reports and Federal Reserve statements are being made.
So for example, if a company has their earnings report next week, it may be an idea to trade other stocks in the meantime, and be wary of the earnings season in general, as one piece of news can completely rock the market and destroy even the neatest flags.
At the same time these news events can catapult stocks favourably for us in context of flags, but it’s a bit of a gamble, so the safest option is to be cautious around that time.
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If the entry price of the flag or consolidation is hit, but then the market just starts moving sideways not hitting either entry or stop loss. Is there a point where I can say this is not the typical flag trader trade and just exit?
Yes, it's typically where it stops being a flag or consolidation, becomes range bound, and other opportunities look better. Also, watch to see if the OVI remains in the direction of the dominant trend, and the presence of Big Money Footprints, ...
Is it normal enough that after a trade is filled that it comes back into the flag (bull) and bounces along like that for quite a few days before it thinks about going back up through the original buy stop order level again?
This is something that can happen. Ideally when the stock breaks out it keeps going, takes out our first profit target and then some more on top, which you manage by use of Guy's Dynamic Trailing Stop. When the markets are breaking out big time ...
I was wondering once Guy checks the top and bottom of the flag how he determines at what level he decides to enter the trade? Sometimes it is 7 ticks above/below the flag other times it could be 9 or whatever.
We try to avoid being caught out by past Support and Resistance areas. Also we look for some clearance beyond the flag or consolidation itself. It can vary according to factors such as other Support and Resistance, and whether we're near a round, ...
What does the OVI do?
Simply put, the OVI measures the flow of the big, smart money in the markets. It does this by monitoring the activity between buyers and sellers of options. You do not need to know anything about options trading to use the OVI. But by looking at ...
The trades I have put on have not worked, I’ve made some losses, what am I doing wrong?
The only way you can lose money with these methods (if applied correctly) is on a false breakout. In other words, you get triggered into a trade, and then it retraces and stops you out before P1. This scenario is highly unlikely if: A) The flag or ...