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.

The Trade:

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)

The Coghill Flag (A Trade Set-Up)
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