{quote} I'm a little shocked to hear you say that Sonic
The angle of the Dragon is a measure of momentum. We can see from Sonic's UJ trade last week that the Dragon was indeed angled up! However, this was Sonic's EP2. His EP1 was a Scout entry made much earlier when PA was below the Dragon and the dragon was actually angled down!
Sonic has started using the Week bar to establish his bias for trading. So, no matter if the Dragon was flat, or even angled in the wrong direction, Sonic had his long bias and was scanning PA to make a long entry. When he saw enough PA to be convinced to enter long, he did so as a Scout trade which totally ignores the state of the Dragon. So, I wonder if his statement referred to not considering the Dragon when he opened the trade with a Scout entry instead of a Classic entry, because aside from the Classic entry being outside the London session it was ok in other respects.
As PVSRA develops, a "most conservative" plan would be:
1. Use PVSRA to determine if the MMs are bulls or bears.
2. Patiently wait for the Classic setup in that direction.
3. Use Scouts anytime after the Classic entry when the MMs pull back the price, and PVSRA shows the MMs continue to be what they were and are loading up in the same direction.
Had Sonic followed this "most conservative" plan, his Classic entry would have been the same (proper Dragon angle, etc.), but his Scout trade would have come after the Classic entry, and it would have had a better (lower) price! (see pic.)
I remember when Sonic introduced the Scout trade. There are times after price has been run hard enough in one direction or the other that it is obvious that an entry in the reverse direction has really good odds to be profitable. The Scout was a dramatic "opposite" of the conservative Classic trade, but it was easy to see the reasons to start trying it. Unfortunately, all the "requirements" for it have always been vague and subjective. They still are. Nowhere will you find in this thread specifics for the Scout that are quantitative instead of subjective.
As I have been working with PVSRA, on my mind has been growing the thought that the Scout could be reigned in and used as a "supporting" trade after a Classic entry. So, right there is a quantitative specific. Using PVSRA, when the MMs pullback prices after a Classic setup and breakout, whether the pullbacks are higher or lower than the Classic EP, these can be excellent opportunities to build the position that started with the Classic entry, and using PVSRA to assure the MMs remain what they were, and are just maneuvering price to build their own positions.
PVSRA better qualifies Classic and Scout entries, reducing the risk of both, and using the Scout as a method to build upon the Classic trade already started makes the Scout an incredibly lower risk trade than it currently is.
Personally, I am going to start experimenting with this "most conservative" plan next. Perhaps starting this new week.
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