Hey Dragon,

I believe that different people look at the same thing in a different way. That's the way it is with trading approaches. Big Mike or Sharky might trade differently than TRO or whoever..... ultimately you have to find a way that makes sense to you.

Trendlines don't prevail. Trendlines shows a trending market(either up or down like a flight a stairs), patterns forming, possible entry into a trade if the pattern breaks the trendline. Take a look at Jeff's chart he just posted. Pictures can show allot of great information.

Candle recognition comes with time.

Don't be afraid of drawing trendlines on a chart. They can help you see things that you are possibly not seeing.

TRO,

I like your rat studies, very eye opening. The challenge is in finding out how to trade this.

First issue is managing the stop loss. This is always my biggest problem in trading. Price could break the low (red rat) and then pullback 15 ticks. You have previously said that you'd exit at -10 ticks. So now what does the rat do? Does he sit out for this candle? Does he try it again at the previous low?

I found it really interesting that there was a big difference between exiting at the H/L and the close. Exiting on the close doesn't look very profitable. The problem is it's not easy to exit on the H or L. So one needs a way to exit. A profit target is the easiest way and could be determined by statistics. But then you'd miss the black swan. So I guess one would have to accept a profit somewhere in between exiting on the low and exiting on the close. How can we do this?

i think one just has to trade on a bigger timeframe, that is the only way to catch those runners on the faster instruments like cl and es.

I'm laughing...and crying.

Laughing...becuase this is sooo simple and probably works better than what I'm currently doing. Crying...because of all the time, money and frustration I have spent on books and indicators.

I have been letting the rat beat me.

No more.

Thank goodness I read this thread.

Thank you TRO...much for me to contemplate.

Cheers
Simon

PRICE ACTION

If price is slowly crawling my way. I will usually exit with a small profit.

If price makes a nice jump and stops. I will exit when price stops.

If price returns to my original entry, I may look for another entry.

One can always exit part of the position at a profit, move the stop up to break even and let the rest ride.

Do not look for the Black Swan. Let it find you.

You're right you answered it in post 414, but the question still remains, what tells you that you should get out and take your profit? Even if it's a black swan event, at some point the trade will end and it's time to take profits? Since you only trade the long side is it a red candle that has it's low broken or something else? I mean if you did have a 10 pip stop and a 10 pip PT then you certainly would be limiting yourself if you in fact did get a serious runner. This is the only part that is a bit vague to me. I understand everything else, cuz it's simple, but if you could explain your method for exit I would appreciate that.

Thanks, Jeff

Ok, but what about my first question about getting stopped out at the beginning of the trade?

How many people want to disable my caps keys permanently? LOL!!