Your observation about a strong trending market is "right on".
As you watch that 3/10 histogram, you'll see a lot of instances where you can take a position aftert the first pull-back in the histogram. That first pull-back won't make it to the other side of the zero line. You'll need to take an entry when that 3/10 oscillator starts to move back away from the zero line.
There are two resons why you will generally see this occur:
1) The trend is so strong that we don't get much of a pull back
2) Volume is so light that using a 1000 tick bar is not describing the pull backs well enough for us day traders to scalp a few points.
Remember, we want that 3/10 histogram to describe what the chart is doing and tell us when pull-backs have completed. Put todays chart into a 500 tick chart. Take a look. As I mentioned a few days ago. Volume is going to be light until the end of August. If the 500 tick chart starts defining the action better for me, I will put that up, too. Adjust your targets and stops if you go down in ticks as the swings will be shorter and faster.
No doubt about it. It is completely frustrating to miss a big move or take a bunch of signals that don't follow through. It's just part of trading. Sometimes you'll lose a little on a big trend day. Sometimes you'll do very well on a narrow range day. It happens. The more you watch that 3/10 histogram, the better you will get at your entries and exits.
I always tell myself, "there will be another bus coming tommorrow".
Good stuff!
Btw, Donkee, if you don't mind me asking what is your YTD % return using this without deviation?
Btw, Donkee, if you don't mind me asking what is your YTD % return using this without deviation?
I'm not quite certain what you're looking for.
I don't trade the same number of contacts all of the time. There are times when I'll add to a position. There are times when I reduce my exposure. There are times when I get in within the first hour and try to "hold a few" all day long. I have other reasons to to get into a trade. I use the 3/10 to fade the PP (this is a trade that is not available on a consistant daily basis). I'll trade a divergence in the 3/10.
As I've said many times before in this thread. I use the 3/10/16 to help me get an "edge" in my entry. I almost always see the market move in my favor for a few ticks or chop around my entry point. Why? Because you will almost never get caught entering a trade in the direction of the momentum when it is about to pullback or peak.
I am always buying a pullback or fading the momentum as it is rolling over.
I do grade my trades at the end of a day. I look at the 3/10/16 and the price chart and mark where I should have entered and compare it to the times of my entries. I then grade my exits. My entries usually get high marks, it's the exits that can always be better.
Quote from DonKee: .....The Strategy is LBR's 1st Cross Trade, as I trade it.....
Who sez indicators don't work? Ha!
While I don't use indicators, I can finally see what LBR's first cross does and it obviously works. It tracks pull backs on a trend.
When I went to her $3,000 seminar, she presented this along with a deluge of other information. However, not quite as clear to me as DonKee's presentation.
When she said you don't need indicators, they just state the obvious. I forgot about it. I know she loves her MACD 3-10-16, but it was always Greek to me.
I find the tick bar on the trigger bar is rarely a big bar, more than 2 full points. Look at all of the 1000 tick bars today, very few were over 2 points. As I said previously, I have a tick countdown next to the current bar. When we get below 100 and we are getting a trigger, I will enter. I will definitely use 2.5 or 3.0 stops if that puts me beyond little swing high/low that just occurred.
Remember, when you are in a good trade, it starts to work pretty fast for you. Once you're up 1.5 points...bring your stop to b/e if you want. If price starts to chop around for 3-6 minutes, I usually just bail and scratch it.
Review the trades that work. You'll see a pattern. Review the trades that don't work or just flop around. You'll see a pattern. After a while, you'll get a pretty good feel for if a trade is going to work within 3-6 minutes.
By watching that 3/10 histogram's momentum, you'll start to see when a trade is accelerating and when momentum is subsiding. This will help you on your exits.
Keep in mind, the 3/10 histogram is measuring the distance between the 3 sma and the 10 sma. It's always going to peak out and start to roll over. You'll want to be exiting when you see that rollover or when you see it diverging with the price.
See attached chart for a sell signal and then an exit when the 3/10 starts to roll over. I've also markes 3 divergences, which can be a great entry signal (I think LBR calls it "3 little indians" )
