{quote} Sorry buddy, i am not in that business.
james16 Chart Thread
- #133,242
- Dec 4, 2014 9:18am Dec 4, 2014 9:18am
- | Commercial User | Joined Aug 2006 | 12,004 Posts
Hi All, thanks for your feedback for my divergence question. based on your replies and some more research, i wold guess it is best to NOT check for divergence unless there is a clear tend in a direction. I found this article very helpful: http://www.babypips.com/school/high-...vergences.html Quoting PhAnTi' {quote} ..., we actually avoid playing the breakout itself. We wait and see for price closing outside the box...
Divergence is a great tool but yes it's less importnat to me in a very choppy market that is diretionless(ie can't be defined by a pattern where the divergence is important).
As for closes. Closes are very important. Now I will rarely if ever just trade a close of a bar outside of a Box, or other breakout pattern. Most that trade technicals do. But then again most aren't profitable trading technicals and struggle filtering their trades. I want additional confluence even on the great patterns or areas using PA bars that we use in this thread. Now don't get me wrong it all starts with your ability to pick strong patterns/areas to trade breakouts from. Without this you are dead in the water and that's where more struggle then say using a close outside of these patterns. Once i've identified a strong pattern that say I want to trade a breakout long their are basically 3 ways I enter the majority of the time
1. A pure break of the area if it is a multi bar high/low
2. a breakout then look for price to pullback to the breakout area and give us PA
3. What I call a pre-emptive breakout bar. Ie a bar that signifies the brekaout is about to come or has just started. Like a BUOB closing just under the breakout area, or just above it.
Again the timeframe I use to trade such a bar is all dependent on the brekaout pattern itself. If I am watching a daily breakout pattern i'lll look for PA on the daily and generally one or two timeframes lower. So the 4hr or 1hr. Now that PA must still exist though.
A close of any " time"is irrelevant to a degree if we want to argue say a 1hr isn't or 4hr etc. THe real importance is HOW and WHERE it closed. And WHAT price did just prior to that closing. And what is around where price closed. I trade mostly 1hr and up and the closes are all relevant to me. 4hr is simply an aggregation of closed price over some 4hr period of time. Just as a 1hr is just a close of 60 mins worth of price. It's all about the look and how price is closing to give us additional clues of where price is now likely to go in the future.
THe same thing is often said about pinbars(not from you making a general comment) and the j16 trading. " Pinbars don't work! The move has already happened and any move after that is not because of the pinbar" THat's what you hear from people that like to hate on us. That's just nonsense. When you play a pinbar you weren't trying to get in at the low of the pinbar you are evaluating IF that pinbar signifies price can continue in that direction because of a large variety of other factors the pinbar being just one piece of that puzzle. If you took every pinbar you'd never be a winning trader and/or eveyrone would and we know that's not the case.
I bring that up because instead of getting yourself frustrated about "which" close, think about the context of that close instead.
Now there are a lot more nuances with then entering these bars or which bars to avoid that I could never cover in a couple posts. SO here is my best suggestion to you right now starting out.
Start locating STRONG breakout patterns. Not just a few lines that seem to line up but I mean clear as day breakout patterns that are VERY accurate. YEs that's the key to my success is that I look for ones that are clear as day. Where you can interpret it NO other way.
Then start to watch two things, How price reacts around that breakout pattern and how price reacts with STRONG PA indicating where price may go(either for the breakout OR a false breakout).
Check that out for now and I'd guess you'll be pretty amazed. Then you want to get into more advanced things like knowing where to enter and manage the trade. But take baby steps there because if you don't use strong patterns and bars, all of that won't matter and you'll feel the frustration that you explain above
Hope that gets you started
Mike
- #133,245
- Dec 4, 2014 9:29am Dec 4, 2014 9:29am
- | Commercial User | Joined Aug 2006 | 12,004 Posts
Hi mike and everyone. For the past two months,i have never had a loss trading this system,i got over confident and took two losses in a row all from common mistakes like trading towords ppz.how do you guys control overconfidence and how can i get my trading confidence back i did not follow money managment rules so took huge loss.lol.
Glad to see you finding success but don't be discouraged our egos always want to creep up and that's why time spent will be the best way to help subdue it in the long run. With that said logically first off you MUST use MM. The reality of what I think going into every trade is that it may or may not work out. One trade doesn't define a method so knowing that we first must always use proper MM. It has to be the easiest part of what you do since it's just math. The worst thing is to be overconfident and risk too much on a trade that wipes out the hard work of the trades before. So before you ever put on a trade you really can't know your position size without using proper MM. It must just become a routine. You cant click buy/sell without knowing how much based on your trade plan
Now the best way really is that I look at each trade I take as its own individual trade verse a trade im taking after 5 winning trades, or a trade i'm taking after 3 losing trades. You don't want to view a new situation based on previous things that have happened. For example the opposite happens to where someone takes a bunch of losses in a row and then they are gun shy on the next trade or even more apt to trade becasue they want to make back those losses.
For me it all starts from the initial trade plan. I try to do things that prevent me from ever getting to far out of line. It's about taking trades that I can effectively manage my losses(ie cut my losses) and let my profits run. Or what you will hear me refer to as dynamic risk reward. It's about being picky on your entries because those come up less and give you more time to think through and be logical rather than be emotional and trade based on highs/lows
long story short, the more you plan out what you do the less you have to mess up with your emotions
Mike
- #133,248
- Dec 4, 2014 10:24am Dec 4, 2014 10:24am
- | Commercial User | Joined Aug 2006 | 12,004 Posts
{quote} Divergence is a great tool but yes it's less importnat to me in a very choppy market that is diretionless(ie can't be defined by a pattern where the divergence is important).
Here is my chart I sent yesterday to the group about a pattern I am watching.
This chart is the "squeeze" pattern. So price is SIDEWAYS. BUT like above price can be defined into a pattern. Notice each time price makes a new low it has bounced higher. So it's a good area to watch for PA(green circles) and use divergence as an indication price may be failing as well as watch for breakouts
but you want to layer on confluence when you can find it too. Notice price breaks out of the previous support then boom we get a big 4hr buob closing back above it. I bought on a retrace to the support area
now we are up near the breakout area and i'll watch how we react. THe key here is I got in at the appropriate area with strong confluence. And logical areas to reduce my risk.
- #133,258
- Dec 5, 2014 3:19am Dec 5, 2014 3:19am
- Joined Aug 2005 | Status: Novice | 1,017 Posts
Keeping it Simple
- #133,259
- Dec 5, 2014 3:24am Dec 5, 2014 3:24am
- Joined Aug 2005 | Status: Novice | 1,017 Posts
Keeping it Simple
