Trading Type:
Congestion entrance
Definitions:
1. Trend - is based on the traditional HH HL or LL LH. Heres a link to understand price action trend. http://www.tradeology.com/priceaction.html
2. Direction - the current bar closes below or above the previous bar highest high or lowest low.
Higher Time Frame Rules:
Rule 1 Identify the trend based on a higher starting time frame that is also a multiple of a smaller time frame of 4 or 5. Starting time can be, previous month's end, beginning of the year, previous week's open, etc... The idea is to pick one time and use the price at that time as your reference price to determine if the current trend is up or down.
Rule 2 Next bar closes within previous bars range, this is congestion entrance.
Rule 3 mark the highest high and lowest low of these two bars.
Rule 4 switch to your lower time frame multiple of
Lower Time Frame Rules:
Rule 5 identify the next close lower than the previoous bars low and place entry.
Rule 6 Set stop loss at the highest high of previous bars.
Profit taking is up to your own discretion.Ideas welcome.
Graph: * I will update graphs later based on the rule 1.
This example is based on shorting the market and the inverse is true for entering long any trade.
Objective:
To make this trade as profitable as possible with the least amount of risk.In other words make a high P/L multiple.
Note:
Any suggestions on how to improve on this idea will be updated on this first post to make it easier to find for those who have an interest.
Congestion entrance
Definitions:
1. Trend - is based on the traditional HH HL or LL LH. Heres a link to understand price action trend. http://www.tradeology.com/priceaction.html
2. Direction - the current bar closes below or above the previous bar highest high or lowest low.
Higher Time Frame Rules:
Rule 1 Identify the trend based on a higher starting time frame that is also a multiple of a smaller time frame of 4 or 5. Starting time can be, previous month's end, beginning of the year, previous week's open, etc... The idea is to pick one time and use the price at that time as your reference price to determine if the current trend is up or down.
Rule 2 Next bar closes within previous bars range, this is congestion entrance.
Rule 3 mark the highest high and lowest low of these two bars.
Rule 4 switch to your lower time frame multiple of
Lower Time Frame Rules:
Rule 5 identify the next close lower than the previoous bars low and place entry.
Rule 6 Set stop loss at the highest high of previous bars.
Profit taking is up to your own discretion.Ideas welcome.
Graph: * I will update graphs later based on the rule 1.
This example is based on shorting the market and the inverse is true for entering long any trade.
Objective:
To make this trade as profitable as possible with the least amount of risk.In other words make a high P/L multiple.
Note:
Any suggestions on how to improve on this idea will be updated on this first post to make it easier to find for those who have an interest.