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Question for you. I am testing your system on the RUSSELL today. Would you mind checking this chart and confirm if candle a or b on the 377 tick chart are valid entries.
If Yes they are then if you would have entered on a market order at the close of candle a would you have exited at the close of the following red candle which closed right on the edge or almost within the cloud ? Thanks
P.S. the retracement almost made a Lower Low which woudld have invalidated the trade but it did not as the candle did not close below the previous swing Low. Probably the regular divergence that occured on the last swing High should have turned on the RED light or a warning.
I would have been nervous at point A as the trigger lines were wide spread apart this move can fail on many occassions, the fact that the next down bar held the cloud I would hold the trade and tighten the stop right under that bar
Also you may have noticed my post about using volume as a filter on the higher time frame it would be nice to know if volume was declining on those 2 down bars that came back to the MA this would add validity to the entry if it was indeed declining.
I see your recent update on how the move turned out - those wide trigger lines nailed it
I have added a new rule and included volume. Charles, although the TriggerLines had some space between them we might have considered candle b as another entry as at this point we could expect the triggerLines to roll.
Just watch the width of those trigger lines, moving the stop up under that down bar would minimize the risk so the loss would not be huge.
Also at the time I just saw S&P downgraded Greece again, news we never here until its too late
Also concerning your point of the Stochastic divergence on the prior high - that does not necessarily mean the next move will fail, many times you will get a divergence on the high. this should just tell you that the market is likely to retrace at that point
charles
Thanks @Trendisyourfriend for sharing your russell trade. I'm also watching the russell with Charles' method. Here is a trade that setup recently. Hopefully the chart is readable and self-explanatory.
Charles could you please comment on retracement on 1508 chart that occured at 11:45 cst. If you disqualify it to be a retracement then what would be the reasons. Thanks
The retrace was valid as it pulled back to the bottom of the cloud on less volume. I did not take that one considerring the Stochastic on the 377, I prefer on short signals that the Stochastic pulls above 50 on the retrace, just the opposite for longs. it generally signals a stronger move is coming
