[B]Useful Information and Tactics - Part 2[/B]
[B]Setting the “Dynamic Stop-Loss”[/B]
![](http://img694.imageshack.us/img694/530/dynamicstops.png)
Starting from the left-most arrows, the key is as follows:
Red arrows indicate extreme candles.
Yellow arrows indicate the pre-extreme candles.
[B]Dynamic Stop Loss 1[/B]
To set this dynamic stop-loss, we do the following:
[ul]
[li]We note that the extreme [B]candle’s body[/B] - defined as the colored portion, representing the difference between the open and close - is [U]smaller[/U] than that of the pre-extreme candle.
[/li]
[li]Thus, according to the Orthodox Rules of the CBL, we will set the CBL at the low of this candle.
[/li]
[li]To set the the stop-loss, we calculate the size of [B]the extreme candle’s body,[/B] and then [B]divide it by two.[/B]
[/li]
[li]We then add this to the high of the extreme candle, as our Dynamic Stop-Loss.
[/li]
[li]Whenever a candle closes between the region between the [B]high of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [B]close the trade, and consider ourselves stopped out.[/B]
[/li]
[li]As long as the candle does not [B]close[/B] within the region between the [B]high of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [U]remain[/U] in the trade.
[/li]
[li]The purpose of the dynamic stop-loss that we have set here, is to serve as a protection from sudden spikes, power, internet or computer failures. If it is hit, then the trade will be canceled.
[/li]
[/ul]
[B]Dynamic Stop Loss 2[/B]
To set this dynamic stop-loss, we do the following:
[ul]
[li]We note that the extreme [B]candle’s body[/B] - defined as the colored portion, representing the difference between the open and close - is [U]larger[/U] than that of the pre-extreme candle.
[/li]
[li]Thus, according to the Orthodox Rules of the CBL, we will set the CBL at the high of the pre-extreme candle.
[/li]
[li]The CBL line is reasonably far from the middle Bollinger Band, and so it [B]is not[/B] cut in half.
[/li]
[li]To set the the stop-loss, we calculate the size of [B]the extreme candle’s body,[/B] and then [B]divide it by two.[/B]
[/li]
[li]We then add this to the low of the extreme candle, as our Dynamic Stop-Loss.
[/li]
[li]Whenever a candle closes between the region between the [B]low of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [B]close the trade, and consider ourselves stopped out.[/B]
[/li]
[li]As long as the candle does not [B]close[/B] within the region between the [B]low of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [U]remain[/U] in the trade.
[/li]
[li]The purpose of the dynamic stop-loss that we have set here, is to serve as a protection from sudden spikes, power, internet or computer failures. If it is hit, then the trade will be canceled.
[/li]
[/ul]
[B]Dynamic Stop Loss 3[/B]
To set this dynamic stop-loss, we do the following:
[ul]
[li]We note that the extreme [B]candle’s body[/B] - defined as the colored portion, representing the difference between the open and close - is [U]larger[/U] than that of the pre-extreme candle.
[/li]
[li]Thus, according to the Orthodox Rules of the CBL, we will set the CBL at the low of the pre-extreme candle.
[/li]
[li]The CBL line is reasonably close from the middle Bollinger Band, and so it [B]is[/B] cut in half.
[/li]
[li]To set the the stop-loss, we calculate the size of [B]the extreme candle’s body,[/B] and then [B]divide it by two.[/B]
[/li]
[li]We then add this to the high of the extreme candle, as our Dynamic Stop-Loss.
[/li]
[li]Whenever a candle closes between the region between the [B]high of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [B]close the trade, and consider ourselves stopped out.[/B]
[/li]
[li]As long as the candle does not [B]close[/B] within the region between the [B]high of the extreme candle[/B] and the [B]dynamic stop-loss,[/B] we [U]remain[/U] in the trade.
[/li]
[li]The purpose of the dynamic stop-loss that we have set here, is to serve as a protection from sudden spikes, power, internet or computer failures. If it is hit, then the trade will be canceled.
[/li]
[/ul]