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THREE SET UPS


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THREE SET UPS

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  #181 (permalink)
 Jeff Castille 
Northern California
 
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wgreenie View Post
Hi jeff

You know I am your Big fan. Your All Your Need thread was the first thread I read .. more than twice and it's the longest thread I've ever read up to this moment .. smile .. I'm stunned when I tripped over your Three Set Ups thread last night when I placed "reversal bar" on the Search box. Certainly it's a very very nice surprise. Thank You and Congratulations for another Amazing thread!

After going through your thread twice, I am still lost on the Outside Bar set up. Appreciate your enlightening me please.

For example, you have 2 Outside bar trades today.

1. First one was a Sell. Was the top wick on the green bar a hint to sell and placed a Sell Limit order when it's 1 tick below its Low?

2. Second one was a Buy. I'm not sure how to interpret the short green bar before the blue Outside bar that would tell me to buy and not sell?!

3. I am also not certain where to place the entry price. My guess is 1 tick above or below the High or Low of the bar before the Outside bar once I know if it's going to be a Buy or Sell but NOT both.

I have a better knowledge on the Inside bar set-up. Appreciate your confirmation that you always place breakout trades on both sides, ie Sell and Buy limit orders at the same time.

Thank You .. Thank You for sharing your set-ups with us. My warmest apologies for the above questions.

Beth

Hi Beth,

Responses to your questions:

#1 An outside bar trade has NOTHING to do with wick size of any bar........previous or otherwise.

When I am trading I am thinking......INSIDE.....OUTSIDE......REVERSAL. As I watch the bars develop the possibilities are eliminated one by one.......as soon as the current bar exceeds the previous bar the inside bar possibility is eliminated.........if you are NOT at the end of an up move or a down move the reversal bar possibility is eliminated. So, you are left with the only remaining possibility......outside bar. As soon as I recognize this I place my buy OR sell stop. If the trade does NOT develop I cancel my order.

#2 Again......an outside bar trade has NOTHING to do with the wick size of the previous bar.

#3 The entry buy OR sell stop is placed 1 tick beyond the previous bar. For instance, the forth trade today.......lunch had just finished......price moved below the last 15 minute bar (during lunch hour)........as soon as it did that I placed my buy stop 1 tick ABOVE that bar. How did I know that it would be an outside bar???? I didn't. It was just the only possibility I had for a trade. Had it NOT come to pass I would have canceled the order.

Please read post #1 again.

The inside and outside bar trades are my favorites. 100% mechanical. Since I have been keeping track of them.....they have over a 90% winning percentage. You can check this out yourself.......bring up past months of charts.......put your optimal trading times on the template and see.

Jeff

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  #182 (permalink)
 Todd 
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Got it....thanks for all of your help, Jeff

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  #183 (permalink)
 Todd 
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Jeff,

My understanding of the definition of outside bar must be wrong. It's my understanding that an outside bar is simply any bar that goes beyond the high or low of the previous bar (regardless of open or close price).

It is my understanding that all outside bars on the chart are supposedly blue.

However, I must be mistaken somewhere because lots of the red and green bars go beyond the high or low of previous bar.

Please clarify.

Thanks,
Todd

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  #184 (permalink)
 cunparis 
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Todd View Post
Jeff,

My understanding of the definition of outside bar must be wrong. It's my understanding that an outside bar is simply any bar that goes beyond the high or low of the previous bar (regardless of open or close price).

It is my understanding that all outside bars on the chart are supposedly blue.

However, I must be mistaken somewhere because lots of the red and green bars go beyond the high or low of previous bar.

Please clarify.

Thanks,
Todd

An inside bar is completely inside the previous bar. An outside bar is the opposite, it's completely outside the previous bar. That means it breaks both the previous bar's high & low.

Jeff your last post really helped. I had been waiting for an "almost outside bar" to place my order. Your method of placing it "early" and canceling it if it doesn't develop makes a lot more sense and will help to not miss trades. Thanks for your patience with us!

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  #185 (permalink)
 Todd 
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Cunparis - Thanks! So, for example, an outside bar is a 15min bar that breaches the high of the previous bar (including the previous bar's wick) and then turns around and breaches the low of the previous bar (including the wick) and once you see it break the high of the previous bar, you place your order 1 tick below the low of the previous bar with your stop 1 tick above the previous bar. You assume that price faked out the people who wanted to go long and it's now going to short and will hit a target of at least 8 ticks before reversing again. Is that correct?

Jeff - I just want to make sure you agree with Cunparis' understanding of outside bar.
Question.... what would you say is the range for stops that you place on orders? I know that it depends on the previous bar but would you say that it's between 15 and 25 ticks normally?

Todd

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  #186 (permalink)
 wgreenie 
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Jeff Castille View Post
Please read post #1 again.

Hi Jeff

Your prompt response has made my evening. Thank you.

With your kind explanation + going through your Post #1 again (FYI: I read it many many times and did not get it), I believe I now understand the Outside Bar set-up. I missed what your stated:

... first going one way and then the other!

So when it's likely to be an Outside bar and it's going one way, place a Buy or Sell limit order on the other way .. haha ..

Great that I do not need to interpret the bar (with or without a long wick) before the Outside bar. It's simpler than I thought LOL! Thanks again to you.

Beth (grateful)

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  #187 (permalink)
 wgreenie 
Cambridge, Ontario
 
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Hi Jeff

I market replayed CL 08-10 and did the enclosed 2 trades, ie

1. First short was based on an Inside bar set-up.

2. Second Long was based on a Reversal bar (high volume and long bottom wick). I considered the subsequent LL red bar was a further confirmation that reversal was going to happen (please correct me if my interpretation was wrong) and placed a Buy Stop 1 tick above the reversal bar. Luckily the green bar (after the LL red bar) just matched the reversal bar and not 1 tick higher. Else it would be a losing trade.

With a yellow inside bar coming into the picture, I was wondering if I should cancel the Buy Stop order. Instead, placed revised orders based on both sides of the inside bar. Appreciate your tips. Thank you.

Beth

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  #188 (permalink)
 Jeff Castille 
Northern California
 
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wgreenie View Post
Hi Jeff

I market replayed CL 08-10 and did the enclosed 2 trades, ie

1. First short was based on an Inside bar set-up.

2. Second Long was based on a Reversal bar (high volume and long bottom wick). I considered the subsequent LL red bar was a further confirmation that reversal was going to happen (please correct me if my interpretation was wrong) and placed a Buy Stop 1 tick above the reversal bar. Luckily the green bar (after the LL red bar) just matched the reversal bar and not 1 tick higher. Else it would be a losing trade.

With a yellow inside bar coming into the picture, I was wondering if I should cancel the Buy Stop order. Instead, placed revised orders based on both sides of the inside bar. Appreciate your tips. Thank you.

Beth

Hi Beth,

Both of the trades that you posted are inside bar trades......the only reversal bar trade today occured during lunch.

Jeff

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  #189 (permalink)
 Jeff Castille 
Northern California
 
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Broker: Amp Futures/ Zen-Fire
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Todd View Post
Cunparis - Thanks! So, for example, an outside bar is a 15min bar that breaches the high of the previous bar (including the previous bar's wick) and then turns around and breaches the low of the previous bar (including the wick) and once you see it break the high of the previous bar, you place your order 1 tick below the low of the previous bar with your stop 1 tick above the previous bar. You assume that price faked out the people who wanted to go long and it's now going to short and will hit a target of at least 8 ticks before reversing again. Is that correct?

Jeff - I just want to make sure you agree with Cunparis' understanding of outside bar.
Question.... what would you say is the range for stops that you place on orders? I know that it depends on the previous bar but would you say that it's between 15 and 25 ticks normally?

Todd

Hi Todd,

Yes....Cunparis has got it right!!!

I don't have records of what the average stop is..........remember........if the stop is too big for your risk tolerance reduce size !! Thereby making the risk the same.

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  #190 (permalink)
 Jeff Castille 
Northern California
 
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I have updated the Reversal V6 indicator.........there was ONE thing that I did not like about it......that is........when a bar was BOTH an inside bar and a reversal bar it would paint it as a reversal bar.......this has been corrected. NOW when a bar is both it will paint it as an inside bar.

Both versions (6.5 and 7) of the indicator have been updated in the elite downloads.

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