My 6E trading strategy

June 13th, 2011, 04:23 PM

trendisyourfriend

Potential of 1.5 points on the RUSSELL if exit at the double bottom.

Is the 1508 valid, since it pierced through the other side of the cloud?

June 13th, 2011, 04:34 PM

monpere

Is the 1508 valid, since it pierced through the other side of the cloud?

I have re-read the rules to be sure and it says:

Price retraces to either the 13 MA or the cloud.

In my mind it can poke through the 13 MA but you need to watch if the 377 ticks chart makes a LL or HH. If it does then it invalidates the setup unless we get a similar top/bottom with divergence.

To summerize, on the 1508 ticks chart, price can poke through the MA or cloud but if it does then you need to make sure the 377 ticks chart keeps the sequence of HH HL or LL LH intacts. If it does not then check to see if there is a similar bottom or top formation the if we have you need to see a divergence in the Stochastic.

June 13th, 2011, 04:40 PM

trendisyourfriend

I have re-read the rules to be sure and it says:

Price retraces to either the 13 MA or the cloud.
In my mind it can poke through the 13 MA but you need to watch if the 377 ticks chart makes a LL or HH. If it does then it invalidates the setup unless we get a similar top/bottom with divergence.

Rule #1:

1. 1508 chart candles MUST be making LL/LH illustrated by ZigZag either inside blue cloud or below red cloud

I guess you have to define if the LL or LH both have to be below the cloud. I would not have take that trade with my interpretation of this rule.

-C

June 13th, 2011, 04:43 PM

cbritton

Rule #1:

1. 1508 chart candles MUST be making LL/LH illustrated by ZigZag either inside blue cloud or below red cloud

I guess you have to define if the LL or LH both have to be below the cloud. I would not have take that trade with my interpretation of this rule.

-C

I think you have it wrong. Price needs to retrace to the MA or cloud. This should be easy to understand. It can even poke through it. But if it does you need to make sure the 377 ticks chart keeps the series of HH HL or LL LH intact. If you look at my RUSSELL trade example it should become clear. See chart included.

June 13th, 2011, 06:41 PM

Charles,

I found some difference in your chart (post #340) and my chart (below).

I checked the parameters and they are the same (1,1,true, black). (I'm talking about zigzagUTC)

Would you know why?

Thanks.

PS: I get my data from zenfire too.

June 13th, 2011, 07:30 PM

trendisyourfriend

I think you have it wrong. Price needs to retrace to the MA or cloud. This should be easy to understand. It can even poke through it. But if it does you need to make sure the 377 ticks chart keeps the series of HH HL or LL LH intact. If you look at my RUSSELL trade example it should become clear. See chart included.

I think we have to first remember this is "DISCRETIONARY" system before we further discuss anything.

I'm writing this post as a note to myself also,,,,and purely my opinion.

I looked at over about 50 days worth of charts for 3 different instruments over the weekend and 2 things I found are,,,

1. This system works for sure.

2. Again it's discretionary (you can use this fact with wise trade management to your advantage)

That being said,,,about your 1508 chart,,,since it poked through the other side of RED cloud with flat

line(STRONG resistance) the market just told you bulls are getting stronger or coming back to market.

With this in mind you can manage your trade very tightly or if it was me I would trade only 1/4 of my full

contracts.

Now if there's an ALMOST PERFECT setup with narrow trigger lines, channel flat or moving in my direction,

stochastic moved over more than half, small risk, etc then I would load the boat.

One guy that I'm trying to learn pure price action from keeps saying that the most hardest thing in trading

is staying away from bad trades. He tries to talk himself out of these bad ones all day.

I think what Charles came up with is just intended to do that,,,staying away from losers.

June 13th, 2011, 07:53 PM

trendisyourfriend

Are you only considering these pullbacks that cross the 50% line on the Stochastic ? Is it in your PDF as i don't remember having read anything about it.

I mentioned this several times last week in my post as a nuance to the trade signals

Charles

June 13th, 2011, 07:54 PM

trendisyourfriend

On the Euro, there was this late entry after the huge move.

The 1508 retrace did not reach the MA or cloud

Charles

June 13th, 2011, 07:56 PM

Jura

I've not followed every post in this thread - so perhaps I missed it (my apologies in that case), but what is meant by a "hidden" divergence? In the image I can see a lower price top with a higher oscillator. What makes this a "hidden" pattern?

Thanks,
Jura

refer back to the educational post during Memorial day weekend a complete instruction on the Stochastic is there

Charles

June 13th, 2011, 08:03 PM

trendisyourfriend

Potential of 1.5 points on the RUSSELL if exit at the double bottom.

good trade, perfect setup

Charles

My 6E trading strategy

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My 6E trading strategy