Flag Pattern Stops

[Robby Luca]

No matter what the pattern, the terms will be different from one trader to the next. The 'tight stop' you're questioning may vary from 1 tick below support for some to 2% below support for others. There are too many ifs, ands and buts to give a precise definition as to how tight is tight. Experience will tell you where to place the stop on a case to case basis.

I'm aware. But it's called speculating, giving opinions, sharing knowledge, etc.

 

[Sprout]

? You're implying that every single trader places their hard stops in the same places. Every trader is different and have different strategies.


Yes I can.
Let me be more specific. Typically, you put a stop when the pattern breaks/at the bottom of the pattern or whatever... but he specifically said he uses a "tight stop". So I am wondering if he implied that he stops out even before the pattern breaks, like when he sees it moving towards the break, but it hasn't yet, but he backs out anyway. I was wondering if it is common to stop out before the pattern breaks.

Generally, if you are uncertain of which direction for the breakout, sidelining and using bracket orders above and below the pennant's first bar's high and low can take you into the trade when it decides to break. One key is placing the trigger price at the appropriate offset. One caveat is to watch the horizontal lines of the lateral's S/R as price penetrates it but then closes within the first bar's range. There's a BO and there's a Failed BO, both are possibilities weighted to your bias of perception. The bias is revealed during debriefing.