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THREE SET UPS
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THREE SET UPS

  #11 (permalink)
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Is this the replacement for the "All You Need" thread?

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  #12 (permalink)
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Silvester17 View Post
today I had 3 reversal trades that met all the necessary criteria. using a 5 min chart for ES. couldn't find a single loser.

Hey Silvester17,

Thanks for sharing that chart..........it seems the difference between the "failed" set ups and the winners is volume.

It has recently occured to me that I was looking at volume all wrong.......when there was a big move I assumed that the increase in volume was in the direction of the move when in reality the move was making prices attactive to the opposite side.

Could you share what your "necessary" criteria is for a trade.....I noticed that you focused on the "inside" bars......do you trade the outside bars too?

Thanks, Jeff

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  #13 (permalink)
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Zoethecus View Post
Is this the replacement for the "All You Need" thread?


Well.........if you want it to be.

This is just an exploration into trading price patterns (3 in particuliar).......using NO indicators other than volume.

If you have experience trading these patterns I look forward to your contributions.

I am always looking for simple effective ways to trade. To date (5/17-6/16) these set ups have turned in a 92.24 winning %. During this time period we had one holiday and I was away for 3 other days) This is in spite of my execution mistakes along the way and continued refining of the "rules"

Jeff

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  #14 (permalink)
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Jeff Castille View Post
Well.........if you want it to be.

This is just an exploration into trading price patterns (3 in particuliar).......using NO indicators other than volume.

If you have experience trading these patterns I look forward to your contributions.

I am always looking for simple effective ways to trade. To date (5/17-6/16) these set ups have turned in a 92.24 winning %. During this time period we had one holiday and I was away for 3 other days) This is in spite of my execution mistakes along the way and continued refining of the "rules"

Jeff

Jeff,
It is awesome that you shared this. What are you money management rules to determine what constitutes a winner?

Andrew

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  #15 (permalink)
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Jeff Castille View Post
Hey Silvester17,

Thanks for sharing that chart..........it seems the difference between the "failed" set ups and the winners is volume.

It has recently occured to me that I was looking at volume all wrong.......when there was a big move I assumed that the increase in volume was in the direction of the move when in reality the move was making prices attactive to the opposite side.

Could you share what your "necessary" criteria is for a trade.....I noticed that you focused on the "inside" bars......do you trade the outside bars too?

Thanks, Jeff

it was just a coincidence that there were only inside bars today. here's what I'm looking for in a reversal trade:

- a move either up or down (the bigger the better)
- the last bar before the signal bar or the signal bar itself must have a bigger volume
(indicating that in a up move sellers are stepping in and the move might be over)
- in a up move the signal bar has to be either a bearish inside, outside or reversal bar

that's what I'm basically looking for

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  #16 (permalink)
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AR01 View Post
Jeff,
It is awesome that you shared this. What are you money management rules to determine what constitutes a winner?

Andrew

Hey Andrew,

Right now I am trading a 2 lot........drop dead stops are market driven (as described in post #1) first target is +8, once this has been achieved I move the stop to b/e +1, second target is +16. That's it. I hope to add a third position but until I get more confidence in my entries there is no point to that. Also, moving the stop to b/e +1 after the first objective has been achieved has been proving to be more of a detriment than a help as many of my trades take me out of the second position at b/e +1 and then continue to move to my second objective........I am watching this carefully......but I have not changed the ATM yet. The alternative is to move the stop to -8 after the first objective.

Also.........one of the rules that I have adopted........if a trades goes 15 minutes without hitting my stop or targets........I move my stop to the high/low (pending on if it's a long or short trade) of the trigger bar to reduce my risk. These trades average less than 5 minutes each.......so the longer you are in the trade the less chance it will succeed.

Jeff

Almost forgot......a winner is +8 +1.


Last edited by Jeff Castille; June 16th, 2010 at 11:19 PM.
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  #17 (permalink)
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Jeff Castille View Post
As some of you know I have been working for the last month on three set ups. I thought I'd take a minute and share the results of this effort. The win rate for these trades is over 90% in the last 30 days.

I have been trading CL using a 15 minute chart. These set ups are as follows: INSIDE BAR, OUTSIDE (ENGULFING) BAR AND REVERSAL BAR.

INSIDE BAR: This is the simplest set up of the three. If the current bar closes within the previous bar.....set a buy or sell stop 1 tick above/below the inside bar and put your stop at the opposite end +1 tick. The Reversals v4 indicator paints the inside bar yellow so you can't miss it. The psychology of the trade is that there is indecision in the market and you simply get on board when the market makes up its' mind which way it's going.

OUTSIDE BAR: On this set up you do NOT wait for bar close for your entry......you enter WHEN the previous bar is being engulfed. You still use a buy/sell stop and place your stop at the opposite end of the outside bar +1. The psychology of this trade is a CHANGE in sentiment.......first going one way and then the other.

REVERSAL BAR: This set up is a little tougher........the key is to recognize that this bar MUST occur AFTER an up/down move on higher volume. The wick on the bar (candle) must be approximately 2/3 of the entire bar. The psychology of this trade is that at extreme levels (after a good move) that prices will attract buyers/sellers.

NOTE: I didn't invent these trades........I actually read about them about a year ago and never really persued them until now. I didn't remember where I read about them but......thanks to Silvester 17 my memory has been refreshed !!! These basic set ups were presented by Malcolm Robinson ( a good trader and teacher.) He didn't invent them either ! lol These are well known Japanese Candlestick Patterns that have been around for centuries.

I'm posting yesterdays chart......which was good for 148 ticks on CL.

I've got Roonius working on an improved version of the Reversal v4 but I'll post the current version with the template that I am using.

If you have some experience trading these set ups I'd be interested in hearing from you.

Thanks, Jeff

Jeff,

Thanks for starting this thread....I am also interested in this price action setups.....and I also believe there is potential opportunity to work in filters / confirmation / requirements to get only the higher probability and best risk/reward trades.

I started doing some research on IB with nice outcomes so far....not much sample but positive results. I agree that using the concept of NRx (narrow of x bars) helps to increase r/r also.

We are also working together with Emini_Holy_Grail making a draft of a strategy to code with a proffesional to be able to backtest this concepts for different timeframes, money mgmnt strategies, longer periods, diff intruments, and using some filters optional.

This thread will help us get some more ideas.

GT
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  #18 (permalink)
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To be honest.. i only traded ym, nq, es. I have never traded the CL, not even now. So if your getting positive results, then i guess you can completely disregard everything i said. I also haven't tested it on stocks or equities( not intraday, used to for swing trading).... only on those index futures. You can try tick based or volume based, and find that sweet spot which goes well with your personality. For example, i think anything above a 900tick chart on ym will provide you with good results. Anything less, you tend to get much more false signals. I see people using a 89 tick chart, or 233 ticks chart.. you might as well just use a 1 min chart because theres too much noise, and they become useless. Thats why i talked about time-independent charts, since you can get in and out earlier based on trade intensity. You can also use volume charts( my favorite).




In terms of time frame, i actually traded the 30 min mainly on the nq and ym with best results. It didn't work well on the es. And when i traded those, i had specific rules on my entries and exits. If you go in at market at the close of a 15/30 min bar, you're getting a really bad fill...lol

I only know of one guy that trades candlestick patterns, and he seems like he knows what he is doing( not personally verified). And when he trades those patterns, he has like an 8 page summary of how exactly the candlestick pattern(hammer) should look like( not kidding),in terms of size of the tail, size of the body....etc and he only takes it based on preceding price action on what happened before. His signals actually have more to do with volatility patterns than candlestick patterns. I never followed him so you have to do your own research there.

Those charts you posted, you will get run over alot when the market finds a trend. Just because its a high volume bar doesn't mean its going to traverse.. Thats why i got into bid ask..... its paints a very pretty picture.

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  #19 (permalink)
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One at time

I thought it might be a good idea to look at each bar type on a individual basis.

So........let's start with the "INSIDE BAR"

Since 5/17 until today 6/16 on a 15 minute chart of CL during the hours of 6-9 am PST and 10-11:15 am PST there have been 46 inside bar trades......40 have been winners (at least +8+1) 2 have been stop outs......and 4 have met the criteria for a stop and reverse.

For a trade to qualify for a stop and reverse.......it must hit the initial stop within the trigger bar. On the 2 regular stop outs......the trades did not reach their targets or stops within the trigger bars (15 min) and the initial stops were moved to take us out of the trades without having to reach the initial stops.

Also, I have been trading signals that set up pre pit open and during lunch as long as the trigger bar is within the trading times listed above.

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  #20 (permalink)
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gtichauer View Post
Jeff,

Thanks for starting this thread....I am also interested in this price action setups.....and I also believe there is potential opportunity to work in filters / confirmation / requirements to get only the higher probability and best risk/reward trades.

I started doing some research on IB with nice outcomes so far....not much sample but positive results. I agree that using the concept of NRx (narrow of x bars) helps to increase r/r also.

We are also working together with Emini_Holy_Grail making a draft of a strategy to code with a proffesional to be able to backtest this concepts for different timeframes, money mgmnt strategies, longer periods, diff intruments, and using some filters optional.

This thread will help us get some more ideas.

Hey GT,

We'll be very interested in hearing about your progress in this regard.

I have also recieved inquiries about automating these bar patterns. I think we'll start with the inside bar and see how that goes. At this point it seems that the inside and outside bars do not require discretion and therefore might be good canidates for automation. Let the testing begin !!

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