Thanks Bob. This addition should add some protection against those long runners that don't want to reverse. Take the small profit and wait for the stronger reversal later. Just to add my two cents, I've been looking at another way to decide when to add a L2 or L3 to a trade that goes against you. As I described in earlier posts, I like to trade this system manually with a TP set at 50. I'm entering when I'm seeing first that red, white and blue are at extremes. Price is at top or bottom 1/3 of chart and RSI(8) shows divergence. My idea of when to enter another level is wait until divergence happens a second time instead of just jumping in at a fixed 150-200 pips step. This may help keep DD smaller by trying to reenter at a spot that is more likely to see some reversal. The chart below shows an example. I waited until close of red candles to confirm divergence. First level trade was a no go but second level trade was a winner.
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- Feb 9, 2010 7:43pm Feb 9, 2010 7:43pm
- Joined Jun 2007 | Status: Teach men to fish | 7,383 Posts