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Al Brooks definition: Final Flag
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Al Brooks definition: Final Flag

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Al Brooks definition: Final Flag

I have been reading Al Brook's new book and have come upon a term he uses frequently yet I still don't have a clear picture in my head.

Final Flag:

the best definition I have found which was on the Al Brooks PA website is: "A horizontal patter after a trend." This is a trading range and if so, what might the difference between a "Final Flag" and a trading range be??

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ElectricWiz View Post
I have been reading Al Brook's new book and have come upon a term he uses frequently yet I still don't have a clear picture in my head.

Final Flag:

the best definition I have found which was on the Al Brooks PA website is: "A horizontal patter after a trend." This is a trading range and if so, what might the difference between a "Final Flag" and a trading range be??

Hi EletricWiz ,

might find some answer on this pages

Analyzing Chart Patterns: Flags And Pennants | Investopedia

Flag, Pennant (Continuation) - ChartSchool - StockCharts.com

try google some more..but final flag i didn t find either , might be the last flag in a row when a market makes a move and makes pushes for instance, usually 3-4 ...just guessing

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Answer
This post has been selected as an answer to the original posters question Answer

Hi,

1. Extracts from Brooks' first book:

"A protracted trend often forms a horizontal flag that extends sideways for several bars, breaks a trendline, and then breaks out to a new extreme but quickly reverses in the next few bars. This Failed Final Flag breakout often marks the end of the trend and sometimes leads to a reversal. In most cases, there will be a tradable, extended Countertrend move that will have at least two legs. A key point is that the flag is usually mostly horizontal and often can be as simple as an ii pattern."

"Failed Final Flags: after the breakout from the flag, the market comes back to the flag and usually breaks out of the other side."

2. Principle sketch in my understanding:
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3. Examples for Brooks' first book as I understood it:

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4. Just to be clear: I will not enter into any discussion on the technical aspects or relevancy of Brooks' theory. Not because I do not want. Just because I do not feel enough competent to do it. My purpose was just to help you with the vocabulary, because I remember that I suffered a lot with his semantics when I studied Brooks myself.

Nicolas

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Nicolas11 View Post
Hi,

1. Extracts from Brooks' first book:

"A protracted trend often forms a horizontal flag that extends sideways for several bars, breaks a trendline, and then breaks out to a new extreme but quickly reverses in the next few bars. This Failed Final Flag breakout often marks the end of the trend and sometimes leads to a reversal. In most cases, there will be a tradable, extended Countertrend move that will have at least two legs. A key point is that the flag is usually mostly horizontal and often can be as simple as an ii pattern."

"Failed Final Flags: after the breakout from the flag, the market comes back to the flag and usually breaks out of the other side."

2. Principle sketch in my understanding:
Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


3. Examples for Brooks' first book as I understood it:

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Please register on futures.io to view futures trading content such as post attachment(s), image(s), and screenshot(s).


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4. Just to be clear: I will not enter into any discussion on the technical aspects or relevancy of Brooks' theory. Not because I do not want. Just because I do not feel enough competent to do it. My purpose was just to help you with the vocabulary, because I remember that I suffered a lot with his semantics when I studied Brooks myself.

Nicolas


Well done sir, great explanation and the charts help with the visualization of the idea.

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It's so painful reading his book.
Anyone know what he meant by failed failure in a breakout?
And how he counted High1, High2, Low1, Low2?

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Hi,

As far as I understand, a "failed failed breakout" refers to the following situation.

There is a breakout...
... but no follow-through, so the price comes back, at least a little, into the range: it is a failed breakrout...
... but, eventually, prices breaks out.

Nicolas

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With respect to High 1, High 2, Low 1, Low 2, I feel that they are defined more clearly in the article "Five minutes to fame in the E-mini" available here: Five minutes to fame in the E-mini

Extract :

Quoting 
One important concept is that of a High or Low 1 or 2. Here’s how it works. The first time in an upswing that there is a bar that has a low below the low of the prior bar, that bar is labeled L1 (Low 1). Examples are Bars 5 and 41 in “First shift.” The next occurrence is an L2, such as Bars 7, 28 and 45. Bar 38 is an H1 and Bar 15 is an H2. There are several nuances to this approach, and one or two will be seen as the day unfolds.

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As far as I understand...

Typical situation where High 1 and High 2 occur is within a down pullback within an uptrend.
The question is: when will the up move start again? Possible answer for Al Brooks (depending on the context) : on H2 bar.

H1 is the first bar within the down pullback, the high of which is above the previous bar.
After H1, there is a small leg up (each bar has a high higher than the previous bar).
Then a leg down (each bar has a high lower than the previous bar).
Then H2 is the next bar with a high higher than the previous bar. And possibly the place where the up move starts again.

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Nicolas


Last edited by Nicolas11; May 16th, 2013 at 05:00 PM. Reason: correction of typo
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Final Flag


Nicolas' explanation was great in clearing the matter. However I have some very elementary doubts. The bar at which FFF is depicted appear to be at different stages of the flag in the different figures. Is it the staff, or the end of the flag itself. If the former, does the flag follow.

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