Professional Documents
Culture Documents
Outline:
1. Introduction
2. Steps
3. Real-time examples
Introduction
Five reasons why am I
doing this
1. For a long time I wanted to write down
my discoveries from over a decade of day
trading for my children, in case they
someday want to learn how to trade (and I
am not alive to teach them).
I promise that if you use this as suggested, you will sometimes lose money.
The money from your account will “flip” to someone else's. How MUCH
money you lose is up to YOUR hunger for risk and YOUR brokerage's rules.
It is NOT up to me.
I am not responsible for your losses (or, for that matter, your profits either).
No method or system (even this one) can rescue a trader condemned to failure
for refusing to treat trading as a serious business that requires self-discipline,
personal integrity, persistence, creativity, flexibility, patience, a willingness to
admit error, and hard work.
In a nutshell, what is the five-minute flip?
An intraday bias calculated after the 9:30 EST open on the
basis of the first several five-minute bars in the S&P e-mini
future (ES).
1303-5=1298
If the market's first swing is
DOWN, take the swing low,
and from that subtract the
HIGH of the first five-minute
bar. Take the difference, and
ADD it to the LOW of the first
five-minute bar
Example
1246+8=1254
What is a “swing high”
and a “swing low”?
If the first trend of the day is UP, then one
must start looking for the swing high.
1. For the third day in a row, the day's first move was
UP. On the previous two days, the FMF was tested as
support and, once failing as such, proved to be
effective resistance.
2. Today, however, the FMF was tested twice, and after
a 1-2-3 buy signal (higher low), the market stayed in
the day's trading range. It closed right by the day's
high.
3. When the market was making new lows during the
12:00 hour, some bulls likely panicked and sold,
thinking the high of the day had already printed. BUT,
the bias was still up, as long as the FMF served as
support.
Question: What if the second
bar of the day is an OUTSIDE
bar? If the market takes out
BOTH the high and the low of
the first five-minute bar, how
can we tell the direction of the
first move of the day?
Answer: There IS no easy answer here. I see
three possible options (#1 is the best option, #2
is the second-best, and #3 is the least-useful):