TWO TIMES TRADE AFTER THE FLAG CANDLE AND STOP.
Recommended initial capital : 5020 USD/EUR (You will have 8 levels)
Number of trade after the flagcandle : 2
Incremental investment Levels :
budget is under 1000 USD/EUR : 2 or 4 (After each loss increase the starting level)
Budget is 1000 USD/EUR and above : 8
With that technique we'll start to trade 2 times after the flagcandle. If we win on the first one or on the second one we'll STOP trading.
Exceptions on this rule : If two flagcandles comes right after each other, or there is only one TIE bar in between, we need to increase the number of trade from 2 to 3 and also increase the investment level. But if there are more then two flagcandles comes after eachother, STOP trading.
In case of we lost the trade, wait for the next flagcandle to continue. (There must be about 10 minutes in between 2 flagcandles to start a new trade.)
If we started with 5 USD and next 10 USD, we should start from 25 USD after the second flagcandle.
Before we start trading after the flagcandle, we must check it first weather it has, or previous one has very long body or not. If combination of two candlesticks are too long, and not breaking the support & resistance levels, then WAIT for the next opportunity. I'll try to explain cases with pictures.
Two times trade after the flag candle, whenever you win stop.
Two flag candles comes after eachother. What we will do ?
We'll stick on the second flag candle's direction. In this case we should increase our stop level from 2 to 3.
TIE candlestick after the flag candle. What we will do ?
If the period finished TIE on the MT4 platform, we'll ignore this trade continue as it's new bar after the candle stick. As a general rule we'll always ignore the TIE bars, and stick the direction of previous flag candle.
Three flag candles comes after each other. What we will do ?
In this case we already lost two times because of the first and second flag candle sticks. We must stop trading and wait about 8-10 minutes for the next trade.
Two loss after the flag candle. What we'll do ?
As you know flag candles are indicating the break point of the trend direction. If we loose two trades after the flag candle, and still there is no another flag candle showing the opposite direction, usually trend will go to the same the direction. But we assume that you are not expert, it's better to stop after 2 loss in this case and wait about 8-10 minutes for the next trade. In this example, after we wait RED arrow was indicating the direction down. Very next candle also became a flag candle and there is no gap in between them, we have to trade in the direction of last flag candle and we won on the 4th level.
Two Loss after the first flag candle, but second on the second trade, candlestick became also another flag candle. What we will do ?
If the candlestick became flag candle on the second loss, we don't care, we must ignore it and we have to stop trading and wait for 8-10 minutes for the next trade.
As you can see on the picture below, market is not stable.
Should we trade after each flag candle ?
If you compare the flag candle's body with the previous candlesticks, you will see that sometimes they are too long, or with the combination of previous candlestick together they became much longer that other candlesticks, in this case it's better to avoid to trade after this kind of flag candles. On the other hand, although the flag candle's body is too long but crossing the support & resistance levels in that case we should start to trade after it.
Sometimes flag candles can come after 5-6-7 same candlesticks, it's usually because of previous reverse candlestick is long enough to cover those 5-6-7 small candlesticks. in this case we should be careful and better not to trade.