We propose an automatic and dynamic trading rule based on flag pattern recognition. The strategy does not depend on the ability of the trader to guess the best configuration of the trading rule. We include several filters for the trades, one of them considering the EMA indicator in short and medium timeframes. The trading rule is applied on a large intraday database for the DJIA index. We can conclude that our proposal is far superior to the previous flag pattern strategies as regards both profitability and risk.
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