DislikedWell, sometimes I feel like a deer in the headlights, however, let me try and verbalize my interpretation of this as best as I can.
As far as "rescuing" a trade, I understand we may only use the the fib retracement as a measuring tool not on price but for leg size and "levels" or "degrees" of the progression that the trade proceeded against the original position. This is the degree of martingale that is applied to the rescue along the fibonacci progresson.
example:
1. Leg of trend is x to y.
2. Trade goes against you to say the 161.8% fib level which technically is the 6th factual logarithmic level, (excluding 50% as it is not an actual fib). This would have had to happen fairly quick (high thrust) to get all the way to the 161% before stalling in price action (where the dance changes pace).
3. Fib Progression is 1,2,3,5,8,13,21,34..... The 6th degree or level in the progression is 13.
4. 13x original lot position is the martingale rescue size that must be aggressively added to the overall position for a counter attack at the price action stall which in this particular case is the 161.8% fib of the leg.
This is a desperate situation which calls for desperate measures, therefore MM and proper capitalization is of the most importance..
Is this more what you are referencing, or have I completely lost sight of what I thought I understood?
Thanks fti
NPIgnored
like I said you already have a true understanding of the mechanics of what i am highlighting on MM.
My respond was mostly for the benefit of wavetrader3 and some others I had noticed is branching out of the mainstream.
In the begining , my intent was to highlight the basic fallacy , that the Technical Analysis has mutated towards, were I later did hightligt some knowledge about "the dance" but without showing how I do it. "3 kingdoms" for me is a very private thingy , as it is the "bread & butter" secret, if you like about my methodology.As I mentioned to Leighsww, I much prefer that members here should decipher it from my postings, instead of me giving it outright in a PUBLIC forum, for fear that this may be modified and sold as a black box scam.
To confirm your understanding, as per your example.
1. Leg of trend is x to y.
2. If trade went against the trader 161.8% at 6th level, you would find my junior and senior dealers already "finished for the day" and I would be carrying the book. This would have to mean that both the juniors and seniors were trading sgainst the major trend. It also would mean that the book base would have changed for the third time. ( no dealers would have the book line to carry the necessary rescue). For Juniors thry would have liberty only for 1,1,2 and for seniors 3,5,8,(4,4,8), then my book comes into the picture.
3. If you noticed the 6th level is not 13 but 8.
4 8X book is way beyond any individual trader could afford to trade, unless the base is at unreal small, and unless trading for fun, its not ROI wise possible to happen in real life.(unless you were a bank, or the likes of.)
In reality , for this to haappen , it already saw two levels of novices risk managers (junior & senior). As a matter of fact , if this happen, you would mostly find that I was already trading against them in the first instance.
Assuming that this can happened, then they( senior) would have to explain to me why they continued trading against the trend.
If you are privy to RN Elliot's studies, you would understand that the trend direction of any market is by virtue of the impluse wave, and a 3 legged abc retracement. If any impluse wave was determined, then the snowballing of positions would be limited to the 3 retrace leg. impluse to 1, AB failure swing and retrace leg BC.
If there was a failure swing CD, and subsequent retrace leg DE, then the whole impulse sequence would have deemed the original impluse non impluse.
Correct?
So if senior dealers averaged the trades into the failure CD. and averaged into leg DE, they would be in effects trading against trend.
So thats why it cannot happen. The snowballing would be limited to 3 levels wrongly implimented by the juniors.
When the seniors take over their book, upon the junior being "finished for the day". They would inherit the loss book and would in sffects be repositioning for the impulse starting from AE as the impulse base with a progression base of 4X. and with a sequense of 4,4,8.
And if the same unfortunate turn of events happened for the senior traders to become "finished for the day" then the book would land on my lap.
And I would inherit a book which carry a loss for both events.
But when I come into the picture , I would have to deal with two failed impluse waves.which put market in a sequense of a broad congestion.
So i would have to deal with the situation as from that point onwards.
My base size would now be 20X junior base of 1X, right?
So guess what my sequense of size will be? (20,20,40)
About Elliot,Please be aware that I use the elliot studies true to Elliots 1st published findings as in the compiled working papers of "The major works of R.N Elliot" and that I am not a subscriber to his latter added study sequenses of multi wave-curve fitting techniques. AND that I am total adverse to the tweakings by latter day Elliot students and researchers, who I am to the opinion have adulterated Elliot's initial published research as well as those tweaks that Elliot did in his later years, when he was believed senile. Therefore I totally do not believe in "alternative counts" and stuff like double zig-zags and compounded counts.Neither do I subscribe to the widely commercialised publishcations of that wave 4 must be above wave 1 for the elliot count to be effective nor the predictive aspects of the elliot wave count. I use the elliot wave study to compliment the implimentation of fibo generated sequenses for timing of position rescue size, as a limiter of position snowballing only. As you may realise also to skewing of the progression from dealer to dealer.
regards
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omg...how much risk would you undertake before u close your books too?