No I wouldn't pass the signal for a 2 pt bar, , I would pass a bar taller than say 5 points, that's a bar that's screaming over extension ( very difficult to find on a 1000v chart).My max stop loss with this method is 3 points from entry (using a 1000v chart nq) If I see a very compelling entry in a 3.5 points bar I would place a stop at 3 points from entry max even though the candle is taller. Consider this as a worst case scenario, there are many options and strategies, for example I may place a break even stop as soon as I'm positive 1 point, or place a trailing stop at b/e which advances at .5 from the last price as soon as I'm +2 , infinite possibilities, with a front end like buttontrader. I 'll have to test and tell you what the best strategy is.
So how is the magic tick so important? Doesn't seem to act as confirmation for you if you are already in the trade i
Incorrect, I'm not in the trade until I know what the magic tick is and until I get filled. On top of that, if I'm already in a trade, it can be my stop, so still useful even if in a trade. However.... A more detailed example: There is a double top. The mid swing low is 2000.00 A bar closes below 2000.00 at 1999.00 Now I know what the magic tick is. The magic tick becomes 1998.75 The new bar can hit the magic tick, filling me and giving me the signal simulatenously or it can go higher, never giving me the signal or the fill or it can go higher and then go back down giving me the fill or it can go straight down never giving me the fill. Conclusion, don't mess with the magic tick Anek
Anek out of curiosity, do you use a stop limit with a limit 1-2 tick to ensure a fill (talking bout Nq , no need for it with ES) or is you limit price equal to your stop price (the one that triggers the limit)? I've being using a stop with the limit 1 tick above/below, missed a couple of trades but not too bad.
Depends on the dominant trend of the day. Most of the time the magic tick will get filled, many times you will even take heat on a good play. No real reason to increase risk. Anek
I would like to hear some comments on your trades also from Anek or any of the others. To me it looks like you did everything right, except I don't think I would have taken that 2nd short trade as it was just a pullback, although I can see why you did. Everything is much easier in hindsight... Anek would you have done anything differently?