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The trigger lines are an excellent filter to getting in a trade too early or preventing a bad trad
If you are looking for a long trade you want a candle to close inside or through the trigger lines - but you also want to see signs that the trigger lines will roll and turn up. the greater the spacing between the 2 lines the less likely that 1 bar will turn them.
Let me show a couple of examples
look in the shaded area I drew on the chart
in this example where i went long on that up bar with the blue arrow under it see how tight the trigger lines are just before it. In this case it is likely that the candle I entered on would turn the lines as although they had been red they were not overly spread apart
In this next setup which at the time on the 1508 was a potential long, again look at the shaded box I drew see the up candle with the blue arrow under it closing just above the trigger lines after a doji.
Notice how excessively wide and spread apart the trigger lines are - it is unlikely that this bar will cause the trigger lines to turn. It would have been a good idea to pass on this trade
If the trigger lines are still blue when you get the signal you can go ahead and enter the trade without any consideration of the trigger lines - but that is not going to be the case very often at all. Usually by the time the 1508 candles have retraced enough the trigger lines on the 377 will have turned over and gone red
i hope this helps,
Charles
Can you help answer these questions from other members on NexusFi?
I will look and consider a trade on every retrace to the MA or Cloud as long as the prior price swing made a HH or LL
A good example of this is on post #39 a where I show points of a potential trade on the 1508 chart, and also post 109 talking about knowing when not to trade
The problem i see with your original interpretation is that if A and B have formed then looking for C is not logical as you would need a HH in zigzag (see A). Hence you would be in a perpetual loop.
B is the retracement you'll watch in order to spot an entry on the 377 ticks chart
One concern is about B,
let's say, on up trend, " A" has been formed, now we wait for retrace to MA(that is C), once the price approaches or breakout MA, we start to look for entry on 377 chart, but if on 1508 chart, price continues falling and makes LL( at this moment, we are focusing 377 chart and looking for entry), if we find an entry on 377 and enter, the trade will end up with loss.
I appreciate if anybody can help with this situation.
On your 377 Tick chart, where it says "HL, look for entry", that is another point of confusion as well. That is the point where Rule #3 comes into play. Now, given that rule #1 says the exact same thing as rule #3 (...HH/HL), and given that the interpretation of rule #1 is we only need a HH, then I would assume here that rule #3 also means we need a HH on the 377, not a HL. That would be the assumption, if the wording of the rules are consistent. So, I am not sure about how to interpret that spot on the chart.
I would not have taken the 1st trade - see how wide spread apart the red trigger lines are it is unlikely that 1 candle going through will turn those lines up
On the 2nd trade this was not a setup at all as the 377 ZigZag made a lower low in the retrace without making a double bottom
Also I notice you have the Stochastic Fast indicator on your chart - I suggest you use the slow stochastic it is smoother
If price continues to fall on the 1508 it is unlikely the trade will setup properly on the 377
In the event the 377 does setup properly and trade fails, then that is something that is just going to happen, you will have losing trades with this method just like you will trading any method.
In the Holy Grail thread Garry recommended this book (:
"Reading Price Charts Bar by Bar: The Technical Analysis of Price Action for the Serious Trader (Wiley Trading)"
Amazon.com: Reading Price Charts Bar by Bar: The Technical Analysis of Price …
At the end of the month there will be a webinar with Al Brooks. It is for elite members only. Guys, sign in for elite membership, it is so cheap, nexusfi.com (formerly BMT) site has earned a lot of attention and there is a lot to discover in that area.
