Cosgrove - it just might be that you are hitting a nice jackpot here ... maybe.
When you look at the weekly chart you do that to confirm trend, but you must not disregard the Stochastics.
As you can see from your WEEKLY chart on your post, the ST stochs were JUST about to turn upwards.
On the DAILY chart ALL of the stochs were already on their way.
So what can we deduce from that?
1) That the reversal CAN be trusted with a higher probability of success BECAUSE we have TWO time-frames (TF is the abbreviation I use for those just joining here) which are pointing to the reversal of trend.
It is signaling to us that the INTERMEDIATE correction is over, and the LT trend - a RALLY, is resuming.
2) Because the stochs are very closely knit into Spudfyre's "rope" it adds much more strength to the move.
3) Conversely, in the absence of "fishnetting" or criss-crossing of LT and ST stochs, there is nothing to fear about the trend slowing and moving sideways. There is only one thing this trend is wanting ... to rally hard.
I am thinking that the thick yellow line (which represents the 14-3-3 stochastic) will NOT even reach the 23.6 line on the WEEKLY chart.
Why? (We MUST always ask "why" if we are to learn something)
Because the "rope" is so tight - it looks like it will drag the weekly stochs clean off their feet, forcing them to rally hard too.
Don't you love this stuff - doesn't it beat sitting there screen-gazing all day looking for a good setup to scalp 30 pips? (Couldn't help that comment - my adrenalin pumps when I see a setup like Cosgrove is sharing with us).
All of the above stuff to illustrate the importance of NEVER ignoring the stochastics in ANY TF - if it is not a good setup - go fishing ... and come back this afternoon, or tomorrow morning to actually discover a great setup like this one.
You have a great life (fishing is not so bad)
You get exercise
You have no stress
Your profits WILL come - in greater measure than EVER before
(Here insert your own lifestyle benefit!)
And always keep in mind, you do NOT have to be trading every day - just trade the good ones as they turn up - there is no need to force trades that are not there.
Next question: "We're exiting on fishnetting..."
YES! ... or exit shorts when the turnaround crosses the 23.6 from underneath, or exit longs when the turnaround crosses the 76.4 from above.
That is discretionary, but the guidelines have to be given to alert you to the fact that the trend may have run its course. Once you make an exit, I would hesitate to re-enter until ALL the correct factors realign once more.
Sometimes this seems like a hard rule (and it will be up to your judgement and experience to make that decision) because a trade may go on to add another 200 pips!
Ouch! But be content to take what you can and move ahead. Look around (amongst the majors) for another great setup - congratulate yourself for accepting the pips, and again, take a break and go fishing.
Once we relax as traders, nothing will break your confidence, or your common sense. Anxiety kills traders. Cut it out!
Regarding your question on Support/Resistance Cosgrove - I accept wholeheartedly that it is prudent to keep an eye on those. But be aware of the dangers of complicating a simple system. An edge is an edge ... and while you must personalise this to suit your own risk profile, the danger is that we again bog down in indicators.
I developed this because I was fed up with 180 + indicators and so on that were being promoted to traders. I'd had enough and my life was spiralling out of sync with reality! I took a step back and thought: "What th' ..." That's all I would comment about support/resistance. Good, but is it necessary in this strategy? If it helps - by all means observe it.
If you look back at POST #38 you will see the kind of thing that happens. Read through the scenario regarding the triggering of contingent orders - entry/exit/stops and so on. Crazy. How much did THAT hurt traders? So yes - I would use a 150 to 200-pip stop.
Why? (there's that little question again) ...
... Because big moves SELDOM signal reversal of trend. They are the result of NEWS, and only highly skilled people whose lifestyle is geared to scalping-type trading (eg house-bound folks who rely on the intellectual stimulation to give them quality of life) would be able to do well from such volatility.
I have seen statistics that say that over the past umpteen years, only 35 news events have signaled trend reversals. That would be out of (proportionately ... only a ball-park guess) around 3000 news-related events. If you go over these events, you will see a violent UP-swing followed by a rapid DOWN-swing, followed by resumption of the trend in the current direction.
If you have close stops ... you are out of the trade ... and the market goes on its merry way as if the news never happened.
If you make 6,000 + pips each year, it is not too painful to give back 200 a few times as insurance against a melt-down while you are out fishing ... lol ... but I don't see this happening more than twice a year on average ... who really knows - I have not seen it.
Keep in mind that stops should NEVER be used to get you out of a trade - it is preferential to CHOOSE to exit a trade. But the wide stop has its function too - to save you from the catastrophe that would befall you if a 9/11 event occurred. The market can reverse 2500 pips under such conditions.
Again I congratulate you Cosgrove - thank you heartily for your interest and participation. gets my enthusiasm really fired up.