Floyd Why did you enter a short at the first arrow on your chart when price was above the 240 WMA? Thank you. Look at the slope of the 240 WMA is red. This is the key. triplepack On your previous post arrows 7 + 8 appear to be going against price action as described. 7 appears to be triggering long of a lower low 8 also appears to be triggering long of a lower low . Price action for this swing shows a downtrend but you are taking longs. Is it that the 240wma in an uptrend is overidng the price action and you are therefore taking longs ? Thank you for your comments You are right. See the new chart . A WMA will never override price action in a 100% price analysis trade. Amitman The second trade (the loser) could have been easily avoided by entering only one tick below the low of the bar that changd the slope, this is how I trade to avoid whipsaws. But I do notice that this entry method might have turned the 5th trade into a loser. What do you find better? entering right on the close or waitnig for a new low? You can use as trigger a break of the last low/high but first you will require a sharper mechanism for establishing high/lows which can be very difficult and it will require a lot of screen time. Second, in my opinion it will only work efficiently in trendy markets. Third, you will need an extra indicator or extra effort in the analysis to âestablishâ which wave will be big enough to enter a wave that late. Fourth, look at chart as whole, does it make any sense to correct this failure on the trigger (cost of doing business) when you have 7 winners with a 157 ticks max profit range with a very low drawdown for getting rid of 1 loser of only 12 ticks? Talking about the 5th trade, where exactly is your entry point? I guess it's not in the long red bar since you have to wait for it to close in order to know a new wave had started, so if you entered only after the long bar closed how do you know this trade was a winner? Because from what I see the trade had merley made a few tick (2-3) before going back up. Yes the entry is the red long bar (especially if you have pivots, was a perfect retracement to the pivot after it was broken a few bars ago). A winner for example What about a 10 contracts scalp 5 ticks first target half position and stop move to B/E if target is hit ⦠This chart was 6 tick profit range ⦠if you wait for the close to enter the trade you could have been filled at least 1 tick above the close of that long bar so ⦠As someone else mentioned before the 8th and the 9th trade are not valid longs as price makes LL, LH, moreover, I would have entered a short trade right after you made trade 8, which would have been a winner. I corrected the mistake. Yes true was a potential short but not a 100% perfect setup âcause the 240 WMA slope was green. I will address your last question in the next set of developing a PBP posts⦠IronFist I see some differences now. In your chart you are taking trades in the direction of the 240WMA regardless of if price is above or below it at the time. At your 7th arrow, why did you go long here? It was preceded by a lower low. I thought a higher low was required to go long. Or does this rule change because of crossing the 240WMA or the 240WMA changing color? See my last chart I corrected this mistake and yes slope of the long WMA is a better visual aid than price above / below but there are only divergences when you have a change of macro direction. Looking at your chart I see a few entries with more than 6 ticks drawdown to the stoploss, NO. Only 1 winner trade has a drawdown of -10 ticks. The average drawdown for winners was -3.71 ticks However I'm more concerned right now with why my chart, which I've set with the same settings as you, is looking slightly different. You have two red bars here (thus triggering an entry when they change back to green) and I don't. I have a green bar in surrounded by red bars and you don't I have a random red bar in here surrounded by greens and you don't. Your green bars don't start until the 240WMA is crossed and mine start before. The problem is your data feed. My charts are with my live data feed. jjrvat
sorry for any typos here. i'm posting from my Blackjack on the train. jjrvat - my post wasn't sarcastic. i was posting those charts so i could get correction on where i went wrong. i'm using a live feed, too (OEC). i usually leave SierraChart open troughout the day if i'm gone just to try and get an accurate feed because i know that sometimes when i backfill i get corrupt data (especially when using volume candles). i will check this thread again when i get back home and i can see the charts on a full size monitor. thanks for replying.
Jjrvat, Do you use an indicator such as RSI, Stochastics, Fibonacci, etc to determine when to enter a trade or do you rely entirely on the MA's? What indicator do you think is the best to get a sense of when to enter a trade? Thank you. Floyd
Dear floyd I\d really recommand you to read this thread from the beggining. On the start of the thread JJvrat explained why the Indicators to enter are just a final formality for what your price analysis already tells you so it doesn't really metter what indicator you use to enter as long as your price analysis is good and you feel cemfortable with the indicator you entering with. For me I find the MA's to be the best indicator for they are really stick to your price analysis. Lately though, I've started to use candelstick formation to enter as I feel they are more relavent to price action and less lagging then any indicator you'll have.
This makes it even easier for me to trade multiple pairs. The computer shows me what pair/timeframe to look at for the jjrvat trade.
Floyd... For a candlestick entry confirmation, you might try using a close that is equal to or higher/lower than the middle of the body of the previous candle. If the previous candle is a doji or small body, then the close of the confirmation candle should be higher/lower than the high/low of the doji or small body. Many times this will get you a better entry than waiting for an indicator signal such as stochastic crossover, close above/below ma etc.
Dear floyd I can tell what formations I use but i fear this will hardly help you as, IMO, you need to have a lot of screen time with indicators or just with orice action and find what works best in your trading plan so you'll know when, for example not listen to your indicators or when to override what they're telling you. Anyways I you Heikin Ashi candelstick formation, meaning I wait for a retracment (a new wave) and then, if I wait for a long entry for example I'm waiting for a new green bar to appear after the down wave of the retracement and then I enter above it's high.
Hi all, I think JJvrat misunderstood my last question about entries what led me to post a bit wider post about entries. I'll use his last chart to better demonstrate what I mean. You can see I added lines with letters besides them. I'll explain Immdietly. Let's say you know a new wave had started and your trigger to enter is a change of slope (17 HMA in this chart) when does it mean you enter? right on the change of slope? not necceserily. In the last months I encounterd lot of traders that used different methods to enter. Through this chart I hope do demonstrate each type of entry and what are it's upsided and downsides. Each letter next to a line represents a type of entry: Entry A : On the close of the bar where the slope changed Entry B : One tick below the low of the bar where the slope changed. Entry C : One tick below last low. Look on the chart to see what I mean. and now for the explantion. Entry A : This is, if I understand correctly, the type of entry JJvrat uses (at least in his examples) and a lot of other traders I saw. Why use it: you know a new wave had started so just jump in. The entry it with limit order (at least on a more slower charts) what assures you'll get a good fill with a good price thus making your R/R better. Why not use it: sometimes a new wave seems to be starting but then immdietly retraces, like what we have in trade two (the X mark) so just jumping in isn't always so wise. Also, since you enter above last low, the price might just stop on the next support level and you won't make it to your profit target. Entry B : This is what i usually use and some others traders I know. Why use it: Entering only one tick below the bar that changed the slope is a sort of "double confirmation" that assures us that not only a new wave had started but it is going to continue (although, of course, we never know for how long), this, in my experience can avoid many whipsaws (again, like the one we have in trade 2). Why not use it: Entering in that points might be too late (like trade 5) as somtimes the close is a bit far from the low of the bar and this few ticks might be crucial. The entry is usually with a stop-limit order what might give you some slippage or in worst cases you order won't be filled at all. We also have the same problem of entry A of the price stopping in the next support level. As for me, a problem like trade 5 I solve by just not entering a trade when the bar that changed the slope is very big because after a fast sudden big move a retracement must come and I don't want to be inside a trade when this happenes, so I usually wait for a little retracement before I enter or I just not enter at all. To the problem with the stop limit, well I have no solution for this yet but I guess that's the price you pay for avoiding whipsaws. Entry C : The entry JJvrat thought I was asking him about, which as I explaind I didn't (I've asked him about entry B). Also I've seen a lot of traders using this kind of entry also called "break-out play". Why use it: Entering only on the break of the last low assures us we have a continuation of the trend (since we are making new lows) also we broke the last support so price is supposedly free to continue in our direction. Why not use it: waiting for the break of the last low might be a really late entry (see trade 4) thus making a bad R/R ratio for the trade. Also we have the problem again of entering with a stop-limit order. Well that's it. As for me I don't recommand entry C at all, espcially in the PBP method. the only traders who should use this are swing traders that aim for at least a 2:1 reward/risk ratio. In my experience entry B is recommanded in order to avoid many whipsaws but if you're scalping a very fast charts this sort of entry won't be practical. Anyways I've represented the types of entries now it's your choice how to enter. Any comment are welcomed
Thanks for posting that new chart. I'm finally back home and can see it on a full size monitor now I'm confused how you arrived at your drawdown values for each trade. Can you please explain that? Also, the Max Profit Ranges are nice, but hitting each MPR would require picking the tops. I look forward to your posts on profit taking