The finest in trend trading

[hachiko]

Daytime here so I’ll chip in…

1. An Extreme Candle should penetrate the BB in the direction against the trade.

2. If a subsequent candle moves further against the direction of the trade before entry, it becomes the new extreme candle; provided it’s low is higher than the previous extreme candle’s low (vice-versa for long). We never lower the CBL for short trades or raise the CBL for long trades.

3. After the extreme candle closes, the CBL is drawn from the top of the extreme candle and wick (for long trades) towards the right, or from the bottom of the candle and wick (for short trades) towards the right.

4. After the extreme candle closes, a signal candle must occur before entry. The signal candle must have a smaller body than the extreme candle. It must penetrate the CBL and close in the direction of the trade.

5. For a valid entry, the opposite bb must contract toward the mid bb by the close of the signal candle. If it does, entry is upon the open of the following candle.

How’s this, any more suggestions?

WRT mkbrooks suggestion about point #5, I feel that it’s an either/or situation. The sequence can be extreme candle, BB contraction, signal candle OR BB contraction, extreme candle, signal candle. Other points of view welcomed……

[hachiko]

1. An Extreme Candle should penetrate the BB in the direction against the trade.

2. If a subsequent candle moves further against the direction of the trade before entry, it becomes the new extreme candle; provided it’s low is higher than the previous extreme candle’s low (vice-versa for long). We never lower the CBL for short trades or raise the CBL for long trades.

3. After the extreme candle closes, the CBL is drawn from the top of the extreme candle and wick (for long trades) towards the right, or from the bottom of the candle and wick (for short trades) towards the right.

4. After the extreme candle closes, a signal candle must occur before entry. The signal candle must have a smaller body than the extreme candle. It must penetrate the CBL and close in the direction of the trade.

5. For a valid entry, the opposite bb must contract toward the mid bb by the close of the signal candle. If it does, entry is upon the open of the following candle.

6. A multiple entry approach is used when entering the trade.

7. SL is placed just above the high of the extreme candle wick for short trades and just below the low wick of the extreme candle for long trades.

8. TP1 occurs when the price crosses the BB mid line, (at close or any time during candle formation ) at which point, one trade is exited and SL moved to 38.2% Fib (retracement point of no return).

9. TP2 occurs when price crosses the opposite BB if the BB is a bubble, otherwise TP2 occurs once an opposite entry signal is generated.

Needs more suggestions please as my understanding is limited…:o

[tymen1]

Ha Ha Ha!!

Oh you poor people!! :eek:

Confusion plus!!

[B]I did say that this method was not for beginners!!
You were warned.[/B]

Because this method is so finely tuned, it is only best for high lots.
It may, therefore, not be suitable for everyone.

However, I fear that we may be setting out on an origami exercise rather than a trading exercise.

[U]What I am going to do is this…[/U]

1. Set out the rules in an easy to understand way.

2. Try to answer your questions!!
   You questions and response attempts by others are so confusing that even I am confused!!

3)[B] Make an important comment.[/B]

[mkbrooks]

Haha good to know you’re keeping an eye on us, Tymen.
I was thinking things seemed to be getting pretty messy.

I, for one, welcome clarification from “the master”

Cheers!

[hachiko]

I’m glad someone is watching over us. I mess it up just trying to be a scribe.

[tymen1]

[B]THE ENTRY RULES[/B]

1. [B]The CBL consists of one candle only.[/B]
   The entry line is drawn off the high/low.

2. Our [U]CBL search [/U]starts when we find a candle that passes thro the BB - an “extreme” candle.
   [B]After that [U]any [/U]extreme candle is good.[/B]
   It [U]does not[/U] necessarily have to pass thro the BB.

3. [B]Our [U]“entry candle” search[/U] starts when the opposite BB contracts.[/B]
   Before this point, no candle can qualify as an entry.
   This is done to protect against possible retracements.

4. [B]As more extreme candles appear, we set a new CBL.[/B]
   But …
   In a long trade - we NEVER raise our CBL.
   In a short trade - we NEVER lower our CBL.

5. [B]An entry is finally made when…[/B]
   … a candle close passes thro the CBL.
   and
   …that same candle has a smaller body than the extreme candle.

[B]FINAL NOTE

These rules apply for BB bubble and BB sausages.
When there is a level/near level case, or a squeeze area we [U]only [/U]need the CBL.
We have [U]no need [/U]of the 2 special rules - close and smaller candle requirements.

An oversize extreme candle is one which passes thro the mid BB.
If such a candle appears in the level/squeeze case, it is cut in half to effect a practical CBL entry.[/B]

[tymen1]

Haha good to know you’re keeping an eye on us, Tymen.
I was thinking things seemed to be getting pretty messy.

Thank you for the replies - I did not think anyone was here on the forum at this time. :o

I will now do my best to answer your questions.
Please let me know if I have left questions unanswered.

[tymen1]

candle 6 is not the extreme since it makes you get the CBL to a worse entry.
candle 5 remains the extreme. all according to Tymen’s post on that graph.

Your right candle 6 would lower the cbl and Tymen said not to do that.

Correct!!

Sometimes you will get a [U]more [/U]extreme candle than before, but that same candle will actually give you a [U]worse [/U]CBL entry.

We [U]ignore [/U]such extreme candles.
We look for the best CBL that give us an entry that obeys the rules.

As I said…

In a long - NEVER lower your CBL.
In a short - NVER raise your CBL.

[tymen1]

…
I don’t believe it matters which direction the CBL is hit from. Perhaps Tymen can enlighten us.

This is correct.
It does not matter how the entry price is hit.

[B]The important thing is that it is hit!![/B]

[turk]

Hi Tymen1 a huge thank you for such an educational thread and to fellow travellers, a big thank you for all the assistance being offered.

Hopefully an easy question first, earlier in the thread there was a link from Tymen1 to GFT that allowed a demo account to be opened indefinately unfortunately I’m not finding this link, could any one point me in the right direction?

Thanking all in advance.

Cheers

Turk

PS. Tymen1 weclome to Melbourne when you arrive:)

[tymen1]

Hi guys, where am I wrong here ?

[B]There is nothing wrong with this entry!!

It has obeyed all the rules!!
(close, body, BB contraction).[/B]

[gregart]

thanks tymen, that mean i am not completly stupid , but this is a lose no ?

[B]There is nothing wrong with this entry!!

It has obeyed all the rules!!
(close, body, BB contraction).[/B]

[tymen1]

thanks tymen, that mean i am not completly stupid , but this is a lose no ?

Depending on how many pips in the spread, it would be either [U]break even[/U], looking to TP2 for a profit or else slight loss at TP1.

[tymen1]

Also, any thoughts using this system on where to have entered prior to the bubble?

Prior to the bubble - entry on the lower BB to the very left of the chart.

Can anyone reply to how they would handle the exit on this beautiful bubble that occurred today USD/CAD 30M? I have labled the candles for easy reference.

Your chart is very small but I think I see candle 1 as the most extreme candle.

There are no exits meeting rules 1 + 2 for this candle.

[U]But really…….[/U]

Given that all you are doing is an exit (and you have made an outstanding profit from the entry at the lower level point) – then why not just use the [U]simple exit method[/U].

This method, if you remember, simply requires you to exit at the first candle that leaves contact with the Bollinger bands.
In your case that is candle 4 – a wonderful exit point!!

[B]We need to think “outside the box” and not get hung up on the CBL system.[/B]

[tymen1]

jcgibson is right, candle 6 is the last extreme candle and no other candle closes below the low of candle 6 until candle 11.

Candle 11, however, doesn’t look like it’s smaller than candle 6. If it is, then entry is at open of candle 12 (the long blue one at the end).

Otherwise I dont see any valid entry at all :eek:

[B]Last comment on this one…[/B]

[B]I have done this correctly!![/B]

The CBL extension of candle 6 is [U]lower [/U]than the CBL extension of candle 5.
This is a NO NO.

We NEVER lower the CBL. (stated in the rules).

So the candle 5 CBL extension is the valid one.
The doji candle following then obeys rules 1+2.
The entry is then as shown.

[tymen1]

is that mean that we must only look at the contraction of the BB and not the output of an candle ?

or have first an output of BB candle ?

thanks tymen

Greg

I hope that my stating of the rules will help you now sort out the confusion.

[tymen1]

…
Why is candle 5 a potential CBL candidate when it has not passed through the upper BB?
…

Also one last thing. Would it be fair to say that you should look for an opposite BB contraction before even bothering to look for potential CBL entries?

These 2 questions of yours are now answered fully in the rules I have posted in post #2374 on page 238.

[mkbrooks]

I hope that my stating of the rules will help you now sort out the confusion.

Thanks very much, Tymen. Your summary of the rules, and the notes on the charts just now have made everything much clearer, at least for me!

Now I just need lots of practice and revision!

[tymen1]

…
I have to point out an obvious problem with this trade. I’m sure you are aware of it. The problem being…it doesn’t make any money!

…
Does there not become a point of no return where you entry is so near to your TP1 that the entry is null and void as a consequence?

You are quite correct in both points here!! :o

We do have to be vigilant!!

If you think or can see the mid BB creeping up on your trade entry, then it is best to give that trade a miss!!

[B]This trading method is really designed for high lots where a small pip profit has the effect of producing a high monetary profit. [/B]

[tymen1]

Your summary of the rules, and the notes on the charts just now have made everything much clearer, …

Thank you for the feedback, [B]mkbrooks[/B].