The shaded indicator’s machanics are like a macd. If we are in a down trend, and it turns blue on a retrace, it’s like the macd crossing up through zero, then a cross back down is our entry. It requres a minimal reversal in price over time to change colors, and therefore is defined as a pullback.
There is a logic to this method that I’ll try to explain. Here’s an analogy…
Let’s say a car has accelerated to 50 mph, just like a trend. Then there is a “pull back” in the rate of increase, and we see 47 mph. The question then is "how much are we slowing down, and if/when will we accelerate more?
Then the car accelerates again to 48 mph, what would you think now? I think most people would say the same thing. The car is most likely going back to 50 mph, and possibly more. Sound reasoning I think.
Why don’t we just enter when we see the car accelerating? That just gives you a 50/50 chance…I trade by the premise that I dont know where price is really going, and I need a high probability scenario.
Merry Christmas…happy holidays and all that. I had 3 glasses of wine, a vodka and sprite, and some of that chocolate liqueur stuff…so I figured it was a good time to answer some posts.
Thanks for answering that petefader, you saved me from trying to decipher the program file - something I dont really want to spend much time this time of year when I should be getting plastered myself!
First trade of year taken on this method. In on cable long. All factors matched up and my BB’s are also pointing skyward. There is some resistance at 1.6235 to be wary of though…
I had a peculiar feeling that things weren’t going to take off with this one as there were no solid moves after 45 minutes of being in the trade. I got out at +1 pip as PA had ducked under BE a few times and back up again. No sooner did I take the pip, it bombed.
A little luck there but for once, the system failed and there was no major news to cause that move either.
Hey guys…I just looked at that G/U long trade you took. I see it came within about 8 pips of resistance then turned. I actually have 2 to 3 resistance lines there…depending on broker, so nice job not taking a loss there…it was a bit dangerous.
I toyed with taking profit at that point, about 11 pips to the good but thought i’d hang on to see what it’d do. No shame in taking a pip and avoiding a loss if PA looks uncertain
I took the same trade…as I was in it, my 1 hour system confirmed a short…gotta love when that happens. I took some profit +40 and letting the rest run locked BE. Scalps Gone Wild!
I’m a newbie but have been following this thread for sometime now. Firstly, thanks pete, its a great system and simple to follow. And yes, you have to stick to the rules! I learnt that quickly.
Mystic, I managed to catch that breakout using this system, but actually used it on the 1 minute chart, rather then the normal 5 minute, so only managed a measly 30+ pips:)
Working on that part of my trading, follwed the system but lost confidence in myself. Still new so I am expecting losses along the way, but hoping to look at them and work out what went wrong. After a whole day, figured it out and hoping not to repeat it tomorrow.
I had 3 glasses of wine, a vodka and sprite, and some of that chocolate liqueur stuff…so I figured it was a good time to answer some posts. 
