To be honest I didn't calculate the R/R on that one and you're completely right. I wouldn't have a problem with 21:24 but if it were more than that it'd be tough. I recall a post by Feb on this and he gave the options, the ones I remembered were:
- skip the trade
- take it with 24 pt stop and be much more aggressive on trailing the stop
- take it with the 20 pt stop
Which do you do? I need to find his post to read it again. It seems there are often more than 20 ticks to the last swing pivot.
I got 10 ticks on CL but then gave back a few cause I did a 2nd entry on a 2 bar pullback. 2 bars is ok for the currencies on 5 min but for CL I think you need more than that. What do you think?
150 tick is good for CL, for currencies I'm still reading the Feb thread so I think I"ll leave it at 5 minutes while I get more practice. I don't see how 150 can get you in quicker, the bar will break out at the same time, it's just the 150 tick could have more or less bars. I'll play around with it.
OBV would have prevented another losing trade. But one disadvantage I see with the OBV confirmation is that I have been programming my entries so I don't have to watch every tick. If you want to confirm OBV you have to watch it and it could result in missed trades. in Feb's thread they really stressed that you have to take every trade.
Jeff - please tell us if we're sidetracking your thread. The techniques are very similar so I think it should be ok.
PS: 10 more ticks on CL short at 11:39. Meanwhile ES is chopping away..
Last edited by cunparis; September 2nd, 2009 at 11:44 AM.
Reason: added chart (NT is on another pc)
I only take setups where I can maintain my risk to 20 ticks or below. Certainly miss some trades that way but I wanna be here 20 years from now. Once I'm in a trade I'll keep adjusting my stop down to swing highs/lows until either my stop is hit or my profit target. I don't consider this a breakout or breakdown strategy. I consider a trend trading strategy that just uses the breakout/breakdown to confirm the trend.
On CL if I hit 10 ticks I'm out. I suppose I trade more of a breakout strategy on that instrument as I trigger off the breakout and try to get out asap with 10 ticks. If the trade goes against me with CL I'll pretty much walk away immediately. It seems to me that if the set up is right on CL then more often then not the breakout will work. There will still be losers but that's okay, it's to be expected.
I will enter sometimes without an OBV confirmation but then I'll just keep an eye on it. If the OBV fails to confirm after a few bars I'll note that as a possible weakness and possibly be more nimble.
There are plenty of people who trade off that 5 min and do it very well. I just couldn't get comfortable with it but if the 5 min chart is "telling" you what the price action is going to do then by all means stick with it.
The following user says Thank You to Blz17 for this post:
I am very happy to see the direction of this thread ! Besides.... I don't look at it as "my" thread.... it's "our" thread. The original concept was to come up with a simple trading approach using few or no indicators. Focusing on price action. This is definately the direction we're going!! Let's carry on.
What instrument are you trading and what setting is your chart ?
As far as dots changing color..... actually there are three things that should change color.... the 50 EMA the 14 HMA and the Sharky paint bar. All of these are just tools to help us read the price action.
Also, you have made an excellent observation with how dots change color. From what I understand from Big Mike this is often the case.
Why don't you post a chart so we can take a look at it.
Here's a question based on Hamq's observation...... Do we need colors on the moving average and paint bars to trade this template? I posted a "naked" chart with all colors removed. Are the colors a distraction or a help?
Jeff - to be honest I don't think we need any of the indicators.
I am simming the currencies on 5 min chart and I don't think any indicators are needed. Someone new to the Feb thread at Forex Factory posted a chart and it had indicators. They told him to take them off. They still say they don't need them.
50 ema = we can just look for a higher low or a lower high to know the trend direction. if the higher low (lower high) is not a lot higher (lower) then it's not a strong trend. The thing I am learning from all these charts and threads is that you want to enter after a pullback on a strong move. If you have a strong move then the 50 ema is obviously rising.
14 hma = this one seems to go along with the price so well that you don't need it. Similar to 50 ema on a smaller scale
eco bars = Sometimes a breakout starts with yellow. Sometimes a pullback goes yellow and I exit and then the bar turns red again and continues down. I'm not really sure about these.
It's funny cause the other day I wanted to add LBR or something and now I'm thinking I don't need any of it. this is still a learning process, but I think if one starts with price only then one learns what's needed. If one learns with indicators then we can get hooked on them. Like a binky, a bad habit that's hard to break.
I'm also seriously reconsidering my current ES trading using volume and sine wave cycles. I've been buying weakness justifying it by saying the stop is closer. But I'm starting to think buying strength (breakouts) could be even better. This thread has really opened my eyes.
Colors help indicate pattern changes/turning points in the market. Without colors it would be tough to make a decision on whether or not to enter the market. Colors are more or less a visual aide to help with decision.
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