These 2 questions of yours are now answered fully in the rules I have posted in post #2374 on page 238.
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! 
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]
Thank you for the feedback, [B]mkbrooks[/B].
Thanks Tymen, looking forward to the next installment
OK, here I go again! 
I wanted to wait for Tymen to assist with what Graviton and hachiko were trying to do: lay out the rules in a simple, step-by-step fashion. Now it looks like we have that clarification, so I’ve been working on formatting everything that’s been covered so far into some handy PDF references.
As such I have finished two more PDFs to add to our growing collection (if you are new to the thread, be sure to grab an earlier document detailing the overall theory of Tymen’s Bollinger Band DNA trading).
I have made some grammar and formatting fixes to help improve what’s been paid out so far but, as always, no content or images have been changed from Tymen’s original lessons.
The first PDF is a clean, two-page document with just the Four Price Action charts you can print out for easy reference. The second PDF represents the lesson content of the last several installments, along with a detailed synopsis of the step-by-step method for making these entries.
Tymen, let me know if anything is not to your standards and, for everyone else following along and doing our best to learn, enjoy!
EDIT: The CBL Rules PDF has been corrected for Tymen’s typo on not raising/lowering the CBL.
Bollinger Band DNA Four Price Action Types.pdf (141 KB)
The Count Back Line Rules.pdf (91.9 KB)
[B]The logic of your analysis is quite wrong here and I will explain why in detail.[/B]
[B]Firstly, and most importantly, the candles you refer to are not in a BB bubble or a BB sausage.
Instead, it is a BB squeeze area as per my rules in post #2374, page 238.[/B]
Candle #1 doesn’t qualify its before opposite BB contraction.
This rule does not apply here - no BB bubble or a BB sausage.
Candle # 9 is go no where
From candle 9 you could do a quick OO trade to the lower BB.
Candle # 2 is qualified to be extreme candle.
It is indeed an extreme candle and from here you would do a trade into the mid BB for a TP1 profit at candle 5. (The price action retraces to candle 9 – no TP2)
Candle #11 has close below candle #2 and its body smaller. Candle # 11 is qualified for entry.
Irrelevant in this case because of the above squeeze rules.
Candle # 14 is qualified for Exit of trade #1 as the body is smaller and close is above extreme candle.
This is irrelevant also.
[B]The correct way to trade this whole senario is this………… [/B]
[B]First, we discern that we are trading in a squeeze area and not in a BB bubble or sausage.
Therefore, level BB rules apply.
See rules, post #2374 page 238.[/B]
We note extreme candle 2, enter at 3, exit at 5 for TP1.
No TP2 – break even instead.
Candle 9 is again extreme, enter candle 10, exit 1st contract at candle 10 for TP1, go on to the lower BB and exit 2nd contract for TP2.
END OF TRADE.
To enter at the lower BB and exit at candle 12 makes no sense.
[B]In this system the very first principle of operation is that we seek to enter at one of the outer BB and trade thro to the other outer BB.[/B]
That’s how this method works.
In your case, you are entering at the lower BB and exiting candle 12 at the lower BB, [U]thus contradicting the operation of the method.[/U]
[B]In summary, I again warn you RenaLa, that this method is not for beginners.
If you lose your money in live trading with this method, then don’t blame me – I have warned you beforehand!![/B] :eek: :eek:
Great work Tymen, thank you. Just a couple of clarification questions if I may.
- Do the rules operate as a check list ? ie. once the condition is met it remains valid
a) Candle passes through BB - [B]Check[/B]
b) CBL drawn from High or Low of that candle or any subsequent extreme candle. High or Low CBL remains valid until new high or low made—[B]Check[/B]
c) Opposite BB contracts - [B]Check[/B]
d) Candle closes through and / or remains through CBL - [B]Check[/B]
e) if level BB enter trade on open of next candle -[B]Check[/B]
f) if Bubble or sausage and candle body smaller than body of extreme candle -[B]Check[/B] enter Trade on open of next candle
- Is the extreme candle body classified as the candle where the CBL is taken or an following extreme candle with a larger/smaller body that did not produce a valid CBL
Yes!!
I cannot give you the link directly (not allowed on this forum), so if you will google Kinetic FX Trading of Sydney, then get hold of Jay Pace and telephone him and tell him that Tymen sent you.
You will get excellent service!!
SYDNEY OFFICE
Level 9
Permanent Trustee House
23-25 O’Connell Street
Sydney NSW 2000 Australia
Tel: +61 2 9295 9800
Welcome back, [B]kockneerebel[/B].
As always, you understanding is very profound and crystal clear!!
Yes, you could say that we have a check list.
- Is the extreme candle body classified as the candle where the CBL is taken or an following extreme candle with a larger/smaller body that did not produce a valid CBL
The correct candle body of the extreme candle is the one where the valid CBL is taken.
A more extreme candle with an invalid CBL is not really considered.
That is what I see, from the best of my research.
Hopefully, this situation is rare!!
In the case of going from A to B, we are indeed in a squeeze.
As per entry rules post #2374, page 238, we do not apply rules 1 + 2.
We simply take the CBL extension off the extreme candle and enter.
In the post indicated, the extreme candle is a red candle that passes tho the mid BB - it is an oversized candle and we cut it in half to get a decent entry.
For an exit, we can use the [U]simple exit method[/U] outlined in this thread much earlier on.
This simply entails waiting for the opposite BB contraction, then exiting at the first candle that disconnects from the BB walk.
[B]
You are in for a good profit if you do this!![/B]
As a school teacher, I understand about “crash course” learning.
It is not the best!! :eek:
You will forget most of the main points, especially if you have not done any of the exercises in this thread. 
I encourage you at this stage to become familiar with the rules stated in post #2374 on page 238.
Read also how this method was constructed - you will have to go back many pages to where it is introduced.
Also look and study carefully the PDF created by [B]Merchant Prince[/B] in which he summarises the main points.
Unfortunately, unlike my candlestick thread, I do not have someone like [B]FX [/B][B]Carribean [/B]to index all the material in this thread. 
Very common actually.
Even though the first CBL takes place before the BB contracts, for the sake of this example, lets just assume that it happens after the contraction…
We cannot consider hypotheticals because we are dealing with price action and do not know where it will go.
If another candle occurs after the first extreme candle, which has the exact same low as the previous extreme candle, …
Assuming that they are both in the opposite BB contraction area, the most recent extreme candle is the only one to consider - providing that its CBL extension is not worse than the one before it.
OK, I think that just about does it all.
I am now going to take a break, then come back with a [B]very important [/B][B]comment[/B].
I did say that this method was not for beginners!!
You were warned.Because this method is so finely tuned, it is only best for high lots.
It may, therefore, not be suitable for everyone.
You are right tymen
Its not for me, this method didn’t fit in my head
I probably will search for more simple, more real and more safe method to trade
You’ve open my eyes and I thank to you for that
Thanks a lot for your continued efforts Tymen, the answers you have given to my questions were exactly what I was looking for.
You have my ongoing respect and appreciation.
Rock on!!
The rules as posted (post #2374) state that we should never ‘raise’ the CBL if going short? Here it has been lowered?
To me it does make more sense to follow -
Never Raise in a Long
Never Lower in a Short
As these two guides stop us from closing the gap with the CBL and the mid BB, thus increasing the risk and reducing the TP1 reward.
But the rules on post #2374 are the opposite.
Was this just a typo on post #2374, because if not then the above quote is incorrect?
Hi Cordite
I think I understand the confusion. If Pa is going long/rising, we are looking for a reversal and therefore a short trade. The CBL is drawn as price action is rising/long. By continuing to draw higher CBL we get the best entry for a short trade
How is everyone finding the risk/reward ratios?
Are you guys finding trades where TP1 is equal to the SL alot, or is TP1 normally more/less than the SL?
Are the majority of trades entered knowing that the risk is greater than reward if only TP1 is hit?
Is TP2 large enough to make up for this, or are BB hugs required with a simple exit stratergy in order to maximise wins?
I only ask as I’ve always been very much in favour of a set R:R per trade, and of knowing what I would be gaining over losing so that I could calculate whether a trade was worth entering. Some of the examples given have had a TP1 sometimes as much as a 1/4 of the size of the SL, and this of course would mean a risk:reward of 1:0.25,
So, I would like to pipe in and offer that maybe, for traders like myself, another rule line is added, where the reward for entering is most likely going to be at the very least equal to the Risk, if not greater? Of course, a high win:loss ratio will mean that we can afford to take these 1:<1 trades, but that’s somethign that only time may tell.
Thoughts welcome…
To be honest what you have said there and what I said are in agreement.
However, I do think that the rules as written on this particular point could do with being reversed, as they seem to point towards the opposite of what you and I are saying here.
We both understand the need to move the CBL AWAY from the mid BB, in order to minimise risk and maximise reward. This means that in a short trade, we can raise but not lower the CBL, and in a long we can lower but not raise.
The rules in the post I indicated though suggest the opposite.
We both understand it, just making sure that other who come across them do too and don’t start reducing reward and enlarging risk by accident.
Cheers as always for the help, and what a great collective of people this thread has brought together.
/salutes all