The fly


The most crucial aspect of adding tools like chart patterns and indicator verifications to one's trading arsenal is realizing that they are, in isolation, worthless. Only in stacking multiple edges can these trading tools play a more significant role.


Furthermore, it is essential to accept that the edge's significance depends on the time frame and trading instrument.

It isn't enough to find an edge and assume it will work all the time in all time frames and across markets.

With instruments varying in range and volatility and other aspects, it is most beneficial to use ones developed edges rather specifically than universal, even if principle-based tools are applied.


Last but not least, it is vital to back and forward test not only one's own developed edges but especially the hip-pocketed material of other traders. This is significant due to the need for confidence in executing edges. Only if one has seen a few hundred signals with one's own eyes and not only training the recognition of these signals but even more finding confidence in them are they able to be utilized, not creating doubt when applying and executing them.


The fly is an entry setup tool that is composed of the following parts:


1. A preceding directional move

2. A retracement of price towards and through the 20 and 40 SMA(simple moving average)

3. A price increase and move through those moving averages again.

4. A small retracement or sideways move followed by a small price bar(doji) which rests with its lows directly upon both the 20 and the 40 SMA (simple moving average)

5. The entry signal is any price close to the 20/40 SMA pair providing for a small stop = low-risk entry.

6. The fly is a supportive tool for directional reentries or reloads based on risk reduction principles and works for long and short entries.


It has been developed for the intraday ES market but finds merit in other thick traded instruments as well.


Here are some examples:










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