You need to understand more than just the entry signal to make this work for you:
1. You have the entry signal down. The truth is the particular "signal" you use is irrelevant as long as it occurs infrequently as to prevent over trading. you dont want to swing at every pitch. In fact, for a beginning trader, I would only trade off the dailies - using inside bars - much less frustrating, also hourly variations in liquidity become much less important and you can take every entry - it takes 5 minutes a day
2. Understand this is a trend trading method - you need to build positions as you go along. You need to take every entry signal you get and build big ass positions. If you try and cherry pick, you will lose. If you come up with a silly rule like I only take on a new position if my previous position is positive, you will probably lose as well - I've never tested this, just heard people babble stupid stuff like this.
3. Know how and where to put your SL. If you move your SL to break even when your trades turn profitable, without back testing the ramifications, you will probably lose in the long run
Inside bars just give you a simple way to play trends without calculating 30, 40 or 55 day highs to enter on and 12 day lows to liquidate the position. What you end up with is an adaptive system that requires very little computational power to play. Sometimes in a trend you buy a 4 day high, sometimes a 10 day high and a 2 day high and then you liquidate on a 8 day low
Just trail with a big moving average for liquidating, have some patience and away you go (Understanding how casinos use probabilities to make money is also helpful
1. You have the entry signal down. The truth is the particular "signal" you use is irrelevant as long as it occurs infrequently as to prevent over trading. you dont want to swing at every pitch. In fact, for a beginning trader, I would only trade off the dailies - using inside bars - much less frustrating, also hourly variations in liquidity become much less important and you can take every entry - it takes 5 minutes a day
2. Understand this is a trend trading method - you need to build positions as you go along. You need to take every entry signal you get and build big ass positions. If you try and cherry pick, you will lose. If you come up with a silly rule like I only take on a new position if my previous position is positive, you will probably lose as well - I've never tested this, just heard people babble stupid stuff like this.
3. Know how and where to put your SL. If you move your SL to break even when your trades turn profitable, without back testing the ramifications, you will probably lose in the long run
Inside bars just give you a simple way to play trends without calculating 30, 40 or 55 day highs to enter on and 12 day lows to liquidate the position. What you end up with is an adaptive system that requires very little computational power to play. Sometimes in a trend you buy a 4 day high, sometimes a 10 day high and a 2 day high and then you liquidate on a 8 day low
Just trail with a big moving average for liquidating, have some patience and away you go (Understanding how casinos use probabilities to make money is also helpful
DislikedHi-
I read through the first 30 or so pages (really!)and Im still not sure of the exact trade set up.
My take so far is that for a long: if an 60 minute inside bar develops whos high is above the days opening price (rather then the close of the opening 60 minute bar ) then one can take the breakout above the inside bars high?
I think I must be wrong because the charts Im looking at dont seem to bear this out. any clarification would be appreciated. Thanks!
NathanIgnored
