DislikedThakri, No changes need to be made for application to any timeframe, so 4HR will work fine. Make sure you pay attention to the higher timeframe trend. It's always best to trade with the wind at your back. I do have a mental stop that I am comfortable with. It varies based on what is happening in the market. For example; if I have a trade running and some idiot politician says something to manipulate the market, I probably would not care. But if a sudden change to a country's financial position were to occur, I may get out of the trade (if it was...Ignored
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There have been a few requests for how to apply this strategy to shorter timeframes. So here we go...
First, the core rules have not changed. See Post #1 for those.
The shortest TF I will trade is 1HR. Thus, I have included a 1HR chart below with some trade examples in it. Anything shorter is noise and I'm too laid back to stare at 1 minute charts, getting in and out of 2-3 pip trades until my eyes bleed.
For trend reference, I add a 100 SMA (yellow) and a 200 SMA (red) to the chart. The only purpose of these is to provide trend reference. Think of them like a traffic signal: the green 50 SMA completes the picture of "go", "caution" and "stop".
A Note:
Most of the professional institutional traders that I know use a 1HR chart to determine entry. They use a daily to determine what they want to be in and generally when, then use a 1HR to determine actual entry when making investment decisions. The only purpose of this is an attempt to have the investment producing results immediately. Clients get frustrated when you buy a large chunk of something and it immediately goes negative. So the goal is to build immediate confidence in the investment decision. It can fluctuate later and clients will generally understand if it started out well.
I digress...
You will also notice the yellow line in the pane above the StochasticRSI. That is a 34 SMA of a 13 RSI. Some of you may be familiar with Dean Malone's Trader's Dynamic Index (TDI). This is a piece of that: the 34 SMA of the underling 13 RSI. I noticed some years ago that it crossed its 50% line almost in sync with my 15 EMA/50 SMA cross. Actually, a little afterward. I don't really use it anymore but it does provide a level of confirmation. In earlier years, as I was developing my method, it provided an additional feeling of confidence. I don't have rules around using it. I have actually removed the MAs in the chart and only used this hybrid TDI as my guide and it works well. So the choice is yours.
I have placed a white box around each cross of the 15 EMA/50SMA. The arrow that follows points to the trigger candle that has changed color after the one(s) before it intersected and possibly disengaged from the BB. Often the color changed candle is also the disengagement candle and that is fine.
Remember that one of the rules of the trade is the FIRST retrace cycle only. Second and third cycles are an option but those are more risky and that's up to you. Are you a gambler or a sniper? Do you notice the 3rd cycle after the cross down? Tempting with 3 triggers occurring. That one would have been frustrating and while it ultimately produced, I don't have that kind of patience when it comes profit production. Know thyself.
First, the core rules have not changed. See Post #1 for those.
The shortest TF I will trade is 1HR. Thus, I have included a 1HR chart below with some trade examples in it. Anything shorter is noise and I'm too laid back to stare at 1 minute charts, getting in and out of 2-3 pip trades until my eyes bleed.
For trend reference, I add a 100 SMA (yellow) and a 200 SMA (red) to the chart. The only purpose of these is to provide trend reference. Think of them like a traffic signal: the green 50 SMA completes the picture of "go", "caution" and "stop".
A Note:
Most of the professional institutional traders that I know use a 1HR chart to determine entry. They use a daily to determine what they want to be in and generally when, then use a 1HR to determine actual entry when making investment decisions. The only purpose of this is an attempt to have the investment producing results immediately. Clients get frustrated when you buy a large chunk of something and it immediately goes negative. So the goal is to build immediate confidence in the investment decision. It can fluctuate later and clients will generally understand if it started out well.
I digress...
You will also notice the yellow line in the pane above the StochasticRSI. That is a 34 SMA of a 13 RSI. Some of you may be familiar with Dean Malone's Trader's Dynamic Index (TDI). This is a piece of that: the 34 SMA of the underling 13 RSI. I noticed some years ago that it crossed its 50% line almost in sync with my 15 EMA/50 SMA cross. Actually, a little afterward. I don't really use it anymore but it does provide a level of confirmation. In earlier years, as I was developing my method, it provided an additional feeling of confidence. I don't have rules around using it. I have actually removed the MAs in the chart and only used this hybrid TDI as my guide and it works well. So the choice is yours.
I have placed a white box around each cross of the 15 EMA/50SMA. The arrow that follows points to the trigger candle that has changed color after the one(s) before it intersected and possibly disengaged from the BB. Often the color changed candle is also the disengagement candle and that is fine.
Remember that one of the rules of the trade is the FIRST retrace cycle only. Second and third cycles are an option but those are more risky and that's up to you. Are you a gambler or a sniper? Do you notice the 3rd cycle after the cross down? Tempting with 3 triggers occurring. That one would have been frustrating and while it ultimately produced, I don't have that kind of patience when it comes profit production. Know thyself.
{quote} I have an alert set in Trading View that tells me when the 15 has crossed the 50. Sends me a text. I have other alerts that tell me when the candles have disengaged from the BB, HA color change, etc. These allow me to know what is going on without having to be in front of charts. Profitability is a matter of trade exit. Each trade is unique so I determine the exit based on the conditions at the time. But for what it's worth, I have not had a losing trade with this method since I finalized my rule base and executed it[/highlight]...
Just curious how many trades you took in the past several years using this method, dozens, hundreds?