Lot's of trades, lot's of pips
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- #202
- Oct 27, 2008 5:15pm Oct 27, 2008 5:15pm
How do calculate ATR @ 600 or 550 ?
Intellichart atr looks diff. Can u explain. Thx
Intellichart atr looks diff. Can u explain. Thx
The trading strategy uses ceilings and floors to establish stop limits
first and entries following that.
Usually, the maximum possible point in the ceiling(or lowest pt in
the floor) is picked, which in this case was 179(see the pivot pt on the day
candle stick on 10/8/2008) right before everything headed down.
Now as soon as prices start heading up towards the ceiling, use a technical
indicator - atr(10) which stands for average movement for 10 days
to calculate the stop limit. Say if the atr is 600pips(which it was), the stoplimit is calculated as max ceil + 0.5*atr = 179+300pips= 182.
That is the maximum the prices should ever go to with the current volatility after
the ceiling max (179) is reached. If prices breakout above that, it is
then considered a ceiling breakout . Chances are prices would
retract before it gets there. In this case it retracted at 181.2.
Now entries are made 250pips(max fin loss sustainable)
below the stop limit. So 182-250=179.5.
In the previous entry it took a while before i saw the ceiling max (my bad)
and had to make 2 entries to average up to the desired entry pt ...so.
Exits are based upon where the price pivots and every half atr below
that pivot pt is a support level. S1 is half atr below, S2 is 1 atr and
so on. Ranges can go upto S6 or S8 (the floor on the other end)
but traders exit on S1,S2,S3 or S4. Going from S1 to S6, the rewards
increase but so does the risk.
exit on S3 which in this case is 181.2-1.5*550pips= 172.95 or just 173!
-------------x------------
Sorry Greg, for using your forum to answer questions. have
been searching high and low to start my own forum and not getting
anywhere. any help appreciated.
(cheers)
- #219
- Edited 7:38pm Nov 4, 2008 7:35pm | Edited 7:38pm
- Joined Jan 2006 | Status: Greg Wilson | 734 Posts
Hi Travpip,
Good observations. In fact I did make a trade at the obvious S1 floor -- to the downside, figuring price was going to continue down. Of course it didn't (price can do whatever it wants to). Realized my error and quickly cut my loss, recouped loss later above the CPP and tossed in the towel.
Basically flat for the session. Dumb bunny trade. Grade for analysis off S1: C-
Talking points:
The move up to CPP overnight was often "herky-jerky" i.e. momentum wasn't consistently strong, lots of pullbacks on weak but overall steady upside energy. I prefer strong momentum sessions (long, full-body candles).
I forgot about the S1/floor bounce possibility (typically price will continue down if it is a considerable distance away from the CPP when new daily pivots come out. That is, price may try to return to the CPP, but doesn't make it and returns down below previous low. Last night was atypical.)
Worth noting that there wasn't any compelling news overnight. In my opinion the moves up to CPP and R1 were purely technically driven.
Today is election day here in the U.S. I expect markets to be slow until around the London Open (PDT), with important GBP and US news data coming overnight. Standing aside until then, setting price alerts to my cell phone.
* * *
My kind of trading environment = Trending Momentum. This makes trading life easier. I prefer to stand aside and avoid all the potholes when there is lack of trend or compelling momentum.
I'm not a consolidation/tight range scalper: I don't like to over trade. I'm not a position trader: I like action. I'm a day trader: 100+ pips intra-day trends with momentum.
Cheers
Good observations. In fact I did make a trade at the obvious S1 floor -- to the downside, figuring price was going to continue down. Of course it didn't (price can do whatever it wants to). Realized my error and quickly cut my loss, recouped loss later above the CPP and tossed in the towel.
Basically flat for the session. Dumb bunny trade. Grade for analysis off S1: C-
Talking points:
The move up to CPP overnight was often "herky-jerky" i.e. momentum wasn't consistently strong, lots of pullbacks on weak but overall steady upside energy. I prefer strong momentum sessions (long, full-body candles).
I forgot about the S1/floor bounce possibility (typically price will continue down if it is a considerable distance away from the CPP when new daily pivots come out. That is, price may try to return to the CPP, but doesn't make it and returns down below previous low. Last night was atypical.)
Worth noting that there wasn't any compelling news overnight. In my opinion the moves up to CPP and R1 were purely technically driven.
Today is election day here in the U.S. I expect markets to be slow until around the London Open (PDT), with important GBP and US news data coming overnight. Standing aside until then, setting price alerts to my cell phone.
* * *
My kind of trading environment = Trending Momentum. This makes trading life easier. I prefer to stand aside and avoid all the potholes when there is lack of trend or compelling momentum.
I'm not a consolidation/tight range scalper: I don't like to over trade. I'm not a position trader: I like action. I'm a day trader: 100+ pips intra-day trends with momentum.
Cheers
