Monday, October 1, 2007


Pattern/Setup ONE:

First things first:

I ALWAYS put trades based on where and what i think the Indices are are going to trade. If i think the indices are poised to move higher, then i want to position in the best and strongest stocks in the most powerful patterns. and vice versa.

So, Here is the type of flag patterns i like to look for and i consider these high probability patterns and I get excited whenever i spot them. These type of patterns are very common in momentum markets and i usually buy the pattern first and ask questions later.

1. Flags, Flags, Flags: I try to spot flags on ALL time frames. The daily charts are usually the most compelling to me. Always look for strong volume that propells the stock higher for at least 2-3 strong green bars bars, then a narrowing declining or sideways moving bars on declining volume. I like to position in the flag pattern rather than wait for a breakout. Breakouts usually happen fast and are very violent as flags are merely a 'pit stop' and there's a lot of eager traders waiting to jump in.

The Charts above are some examples of Flags I look for: Hope it will help you too.


Doug said...

Good stuff, Stewie, thanks.

Time Is Money said...

look for them tmrw and for ever after! hope it helps. I'll always point them out anytime i see them.

Brandon said...

Hi Stewie,

Pardon me for going through your archive, but I think this is where the treasure is along with the HG articles and the MOMO articles. Thank you.

One question that I still have, that I hope you can expand on, is what steps do you take to hunt for all these set up everyday and how many charts, screens and you have on your set up to make it easier?

Much appreciate if you can expand on it.


Stewie said...

hey Brandon. WOW you really went deep into the archives. I don't use any filters or screens. I just the same 30-40 stocks everyday and just try to spot flags, HGs, reversals etc etc. I do always wanna know what the indexes are doing on all time frames: 5, 15, 30, 60, daily and i always place trades based on where i think the indexes are going to do next. For example i am expecting rally for the week of feb. 18th-feb. 22nd and i will only place long trades in the strongest stocks. hope it helps.

Brandon said...

Thank you Stewie.


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