Just for fun I was checking out an ES chart. I figured $12.50/tick for ES divided by $5/tick for YM = 2.5 so 10 range / 2.5 = 4 range. Which is what you suggested earlier. It looks a bit more clearer but in looking at several days it seems the EMA is grey more on the ES chart than on the YM chart. So that might give less trades. I wonder if there might be a better setting for the ES? What do you think?
I don't doubt that YM is better for your method, I'm just used to ES and I'm already trading it so if I can just do ES it's much easier for me.
You might want to check out a 1600T with a 3600T anchor. These are the two tick charts that Linda Rashke uses for the ES. The best trades this morning were at 7:00 PST ish and 8:30 ish. 11:00 was a pretty good set up also.
Check out these two charts. One, the 10 range bar is your trading chart and the other is your anchor,15 range bar. Personally, I like to see the EMA Blue or Red. Otherwise you might be jumping the gun! If it has not changed there is no trend. Basically this is a trend following strategy. Pullbacks are known as a Continuation Trades. It's hard to continue something that hasn't started yet.There are times when you want to buy a breakout and there are times when you want to buy a pullback. So, to answer your question..... if you are buying a breakout... yes I would place a buy stop 3 ticks above the market and let it take me in. (with a stop below the recent swing low) But........ and this is a big but... remember it could be a bull trap (or bear trap in a short situation)
I think the best practice is to let the market declare itself... wait for a good pullback preferably to the moving average. (also, you might want to get out your fib retracement tool to determine what a good pullback is.... between 50-61.8% or 38.2% are good levels to watch) Then when the trend reasserts itself you can enter at the market. The trend reasserting itself would be defined as HMA turning back the direction of the trend, the ECO bars turning the more intense color in the direction of the trend and a trendline break is good. Learn to identify bull/bear flag price patterns. Also, more complex retracement patterns like an ABC. remember there are usually only 2 good pullbacks and the first one is the best.
Hope that helps, Jeff
Do a fib retrace from the 6:53 low to the 7:17 high and check out the perfect pullback!
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I reviewed the sim trade you took this morning at 6:53 PST and it looks like a late entry to me. I believe that if you had entered at the market at 6:46 when the candle fired up you might have had yourself a winner or at the worst a breakeven trade. Why did you enter where you did? I can see that being in this trade kept you from getting into what turned out to be one of the better trades of the day at 7:03 ish. Were you using the 15 range bar anchor chart?
As for me, I was in the market at that time but was trying a different set up. I got short at 9133.... the market eventually moved in my favor +6. One tick shy of my first target. However, too much time had elapsed and I closed the trade at breakeven. I got a bad fill and took a 2 tick loss on the trade. If a trade hasn't hit my targets or stop after 2 minutes I start looking for the exit!!! I don't like that much exposure.