Is there a chance on a higher profit, if either the size of the flag, or the size of the consolidation is greater than a stock with a lesser size?
You want to stick with neat looking flags or patterns where the consolidation or range of the pattern isn't too deep - otherwise there is too much distance (your 'Practical Risk') between your entry and optimal stop.
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What is the difference between practical risk and theoretical risk?
The below example will illustrate the difference between practical and theoretical risk. Say you buy 10 stocks at $15.00. THEORETICALLY, the stock price can go to zero tomorrow and you can lose all the money you have invested in this stock, which is ...
How do we know that a flag has formed fully and that a breakout is imminent, i.e how many candlesticks denote a typical flag?
The flags (consolidation patterns) we like are generally 3-4 bars/candles (days) long. Sometimes they can go for a bit longer, but that’s a good ballpark. We’re looking for easily recognisable, neat, and compact flags or consolidations, where the ...
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 ...
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, ...
If the length of the flag starts to approach or exceed the length of the pole then its probably time to consider moving on?
We typically like the flag to be a consolidation where the bars are tighter than what has gone on before. This description would seem to refer to a range bound stock forming a channel.