Hi all - I made a spreadsheet this morning while watching the chop the last 30 min and thought I'd share it in case anyone else can find mistakes or improve upon my first draft.
I listed the preconditions for a trade (according to Charles' method) by chart with checkboxes for each trade taken. I include descriptions for each trade condition - with one exception I grouped long/short conditions in each row for brevity and ease of use. I did not order the preconditions according to importance because, as we all know - if all the preconditions are not met, there is no trade. I included columns for 10 trades and colored the columns progressively yellow, orange, and red to indicate that if you're taking a larger number of trades, you may be overtrading or forcing it. I uploaded both xls and xlsx formats.
If you make changes that you find useful or correct mistakes I made, please let me (us) know about it.
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As i have mentioned a lot the importance of looking left before you trade, you need to always be aware of previous S&R points that will possibly stop a move.
Look at this 1508, some of you including myself was initially looking for a long trade here until I looked left. With this S&R level I want to see it taken out before going long as this is afterall a trend reversal setup not a trend trade
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Trading into S&R can work sometimes - but is it worth it for the many times it does not work
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Found one mistake on the spreadsheet - in row 5 I mistakenly wrote "above RedCloud" - this should be "below RedCloud".
The 1508 seems to be setting up shorts in here and the 377 is printing "weak looking" short entries. 4600 is just below so if you take a short, it would seem prudent to manage it aggressively. Probably best to just wait...
I don't believe there is such a thing as over trading. If you have a method, and it gives you a valid setup that meets all your criteria, then you take it, whether it is the 3rd signal or the 33rd signal. The only valid reasons I can think to stop trading is fatigue, or reaching your daily loss, or your daily goal.
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I respectfully disagree. I do agree that if you get a valid signal, you should take it - however, unless you are using a computer to trade for you with no discretionary decision-making (in other words, it is working while you are not present), then you must use discretion to take trades or not. The method we're all discussing in this thread has a discretionary component and if you are taking more than 6 trades per day using this method, your discretion is most likely leading you to over-interpret the indicators and take more trades than you should - thus, overtrading.
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I was taking a look at your short trade you posted and had a couple of questions.
I know you mentioned a stochastics divergence, but it seems the double top had not formed to identify the hidden divergence. I consider the standard divergence seems a little iffy or small so as to consider that a strong enough signal that price will turn after price action has shown a HH. Wouldn't the clear HH have negated the trade?
A couple of candles after the one you labeled entry, there are 2 candles that close inside the cloud. Isn't that the signal to close the trade?