The Coghill Flag
The Coghill Flag is a term I, Ben C. Banks came up with to describe the pattern in which I incorporate on a daily basis into my trading strategy.
This pattern (described below), is the only pattern I ever focus on. The process revolves around the recognition and subsequent action associated with this pattern.
The Set Up:
Conceptually, the pattern is simple. All the following criteria must be met in order for it to be considered a Coghill Flag. If one or more of the criteria is not met, it is no longer considered a Coghill Flag, thus no capital will be allocated to the asset.
- The asset must trade, on average, 200,000 shares daily
- The asset price must be above $4
- Price close to and sitting above a curling up moving average (21 ema or 50 sma, relative to the timeframe of the trade)
- The latest candle must have (the candle most currently forming on time-frame of purchase):
- Closed at or near the highs
- Inside (or close to) the prior day’s range, AKA an ‘inside day’
- A full bodied candle, preferably no ‘hanging man’ or ‘hammers’ (but if there, must meet all the other requirements with ‘flying colors’)
- Below the upper Bollinger Band
- The asset currently within a price contraction period or coming out of a recent contraction (as indicated by ‘pinched’ Bollinger Bands (20, 2)
Note: The above criteria are only for long set-ups, simply inverse the above for the short set-up criteria.
If all the criteria are met for the above set up, capital will be allocated to the asset in this manner:
- No more than .75% of the portfolio will be risked on any individual asset
- A stop loss will be placed underneath the most recent pivot low and/or under the ‘curling up’ moving average
- If the asset breaks out:
- Sell half on a solid break of the upper Bollinger Band
- Raise the trailing stop loss up to the prior candles lows
- Only stopped on a closing basis (last hour)
- If a stock fails to breakout:
Sell full position when the stop loss is hit, on a closing basis (last hour)
Some examples of TCF (The Coghill Flag):
$TSO (8/7), $ACHN (8/13), $BKW (8/27), $AN (S) (9/12), $VPRT (9/17)