that is where 50 % retrace comes in. In chop we just stay rangebound, if market is trending then it will retrace 50% and then move 9-11 from that point.
Thanks all. Still adding it's aspects to the arsenal. I see it clear when all is done, but much more difficult as it is developing (as is true with most triggers). I definitely pull in the stops at the 9 point mark from a reversal or reaction high/low. Saved on several occasions by that little "heads-up". Much appreciated.
I think you are using it correctly. I think of the R10 as a measured move. If you believe you`ve identified a significant swing high or low, you can then project 10 points from that swing. Identifying the swing is more of a technical analysis skill. After I learned about R10 from Volente, I`ve been AMAZED to see how often these play out, often to the tick. 50% retraces is also very important to keep track of. Sometimes the R10 coincides with a gap fill and those are high probability targets.
During periods of increased volatility, we seem to get R20s as well. I`ve yet to experience R30s, but I`m sure the veterans on board have
How one interprets R10 depends on their trading style. I know some traders use it as a potential entry point (with a 2-3 pt target) instead of as an exit warning. But like all techniques and tools, its just something to watch for and keep in mind/combine with other TA.
Correct re R20, but it has to be kept in mind that it is very likely the R10 'trader' took a loss and may recover at R20...but then again,may not.... It all depends on profit goals and stops.... I am inclined to think Volente may have some statistics he could share, but I also recall that not all R10's (9-11) are necessarily taken for one reason or another. Gets back to the trader developing their own strategy and sticking to it....and looking at others with 'interest only'... NiN