Hi Tobbe, I've "known" about washing for a number of years now, but have never understood Jack's drill to practicing it. Icarus was kind enough to give me a nudge in the right direction. Here's part of the PM I received, quoted with permission: I hope that helps clarify things. Have a good weekend. -Au
A few questions for Icarus, Aurum, Jack Hershey or anybody else who practiced wash trades successfully. Having no success with my interpretation of guidelines in the past, I would like to attempt to make these potentially very valuable wash guidelines as idiot-proof as possible. 1. Does the designation 'pt3' highlighted in red above means the bar that one believes to be a future Point Three of the new channel based on: (a) increasing PRV on that bar and (b) the presence of an FTT in the previous channel signaling change in sentiment in the direction of the wash trade. 2. "Watching volume confirm" - does this statement refers to the same 5 min ES bar where one enters, or the following bar. 3. If the "volume confirms", whether it's the same bar, where the entry occurred, or the following bar - when does one exit? 4. How does the presence of pennant/formation fits into the wash trade? 5. Should one pay attention to any YM signals a the time of wash entry? I would greatly appreciate any insight. Every statement or observation with respect to this methodology can not be taken literally and is only valid within a specific context. The statement - "entering at p3 and watching volume confirm. If volume doesn't confirm, you exit immediately." - requires a qualifier, if not several. By example: YM leads ES (at points of change) Jokari Window signals change (only within specific context) Drawing trendlines gives one a religious experience (but not necessarily teaches one how to annotate correctly)
As a disclaimer, I've never conducted a successful wash trade on purpose. I've succeeded in exiting a trade at break even, but that's not the wash trade, per se. With that said, I can only comment with my current understanding and assumptions. Perhaps it wasn't clear in my first post - my apologies. These instructions are clarifications for conducting wash drills. (i.e. see Jack's "Crow's nest" post) As I see it, they will help to build the foundation for understanding and conducting wash trades. These are not rules, but rather several directed steps to help get jump started to doing the drill. With that intent highlighted, I suspect your following questions should change, or perhaps be answered with "I'll have to see what the market says to do in this situation." Remember - "There are a lot of details you will have to add to what I've said." I hope this helps - I realize that I may have frustrated you further, but that is not my intention. Until I've had a chance to actually run through the drill, I can only speculate on many aspects of it. -Au