I would answer the same thing.
Man, i hope its not a sausage for some reason, then i understood something wrong i think. :-/
I still have a big problem to see if i’m dealing with a bubble or a sausage when its still “under construction”. Take a look:
This is obviously a sausage.
Now when its still under construction its often like this:
Ha Ha Ha!! 
Well done, [B]NForex[/B]!! 
You are clearly the King of Graphics on this thread at the moment!!
My time to finally move is coming upon me and so many demands for my attention are now taking my time.
As a result I am finding it increasingly difficult to continue posting right now.
Next week will be my last week of posts, then my computer table will be dismantled.
I will then return to this thread at my new residence - and without distractions!!
There are still more solid rules to operating the [B]Bollinger DNA Method [/B]to be posted.
Once you have these, trading will be so much easier - I do see [U]considerable [/U][U]confusion [/U]at this stage, but I do commend all of you for going ahead and experimenting with what you have so far.
I will for now, try my best to answer your questions.
I will leave the remaining rules for next week at the earliest - otherwise after I have moved when my concentration will be undivided and I can return to forex trading for myself also.
This is GREAT! lol
I think we are all going through a bit of this at the moment.
ANSWER TO EXERCISE
Sorry to say, that most of you are incorrect - it is a sausage!! :eek: 
Well, as a consolation, it does have some features of a bubble.
How on earth did I come to that conclusion? 
The rule is simply this, and I have stated it several times on this thread…
A BB bubble - when the opposite BB contracts, the price action retraces and does not again reach the high it was at when still in contact with the BB.
A BB sausage - when the opposite BB contracts, the price action partially retraces but then regains its momentum and rises above the point where the candles were still in contact with the BB.
Look below >>>
The price action given by the green arrow is typical of the direction taken by a BB bubble.
The end price at point P has not only made its way to the opposite BB, but also the price at point P is a very clear retracement from the price at point A.
In this chart you can see that there is no retracement from point A.
The price at point B is a further advancement of the trend started earlier at the mid BB.
This trend passes thro point A and goes on to point B.
Now it is true that the price action detached from the lower BB.
But that is secondary to the definition!!
The detachment without a return to the lower BB is the only feature in common with a BB bubble, but does not define it as a bubble.
The timing of this exercise was very deliberate!!
I could see the problems with the interpretations of the price action in your posts, so I thought about a method of discerning what you were all thinking and I hence came up with the idea of an exercise.
It had to be a good one so I carefully selected the one given above.
That fact that most of you have answered the exercise incorrectly may be the reason why many of you are having problems setting up your trades.
If the above chart were traded, the entry would have gone into retracement, and, therefore, [U]a loss would have been generated.[/U] because the stop loss at point A would have been exceeded at point B.
This kind of case tends to be more rare.
We need to set up some entry rules so that we can discern between an entry for a BB bubble and entry for a BB sausage.
That is exactly correct!!
Hmmmmmmmm.
Not sure what is going on here? 
This method is [U]stand alone[/U] and should work with a high win/loss ratio in one single timeframe.
Maybe it is because I have not yet posted all the rules!!
Thank you for your post, [B]pips4living[/B].
[B]Graviton [/B]has already done a magnificent job of answering your post.
In summary, I say that unfortunately, neither suggestion has any merit on this thread. :eek:
Here is another example of a BB sausage >>>
At first, the retracement from point A to point B gives the impression that we have a BB bubble.
But when the price action rises to point C, we reclassify our pattern as a BB sausage. 
Excellent graphics NForex. You made me chuckle. Let’s see what we can get from this:
In the first pic on the left, the bbs are a little rough, not pretty and smooth as we often see in a bubble. We will get a very few rough edged bb bubbles, but it’s a clue.
The best indication though is the OBB price action. PA goes all the way from the top band to the bottom, then proceeds to walk down the bottom band 5 or 6 candles. Bubbles rarely have OBB PA that walks 5 or more candles down down the opposite bb. Usually when that happens, it’s a sausage. Another clue.
Note that after PA touches the bottom bb, most of the PA is below and outside the bb. By definition, the bbs should contain most of the PA most of the time. This is acting in an unusual fashion, by definition. Bubbles are pretty and smooth and usual and predictable. Sausages are rough and unusual and difficult to predict. This isn’t acting like a good smooth pretty bubble. It’s PA isn’t contained as it should be. Another clue.
The second and third pics are fake outs. In the second pic, the opposite bb contracts as PA pulls away from the lower bb. That meets one criterion of a bubble. But that can also happen very many times in a sausage, so if you were still short here you’d probably want to TP2 and wait it out, looking at the doji candles and long wicks in TP2. This seems like conflicting information, but it’s really not since all info could possibly be consistent with a sausage, but all info is not consistent with a bubble. Don’t be faked out by a single contraction and bb bounce of a sausage. Since a sausage will usually have many of those, it means nothing by itself. We need to look deeper. More importantly, we need to balance having the courage of our convictions vs. keeping an open mind and considering the opposite case. Well, we’ve considered the opposite case, but do we have the courage of our convictions?
The temptation is always to over trade. The greater temptation, and the cause of missing many huge follow-on profits, is all of us have a “one bird in the hand is worth two in the bush” mentality hard wired into our brains. It’s an evolved survival strategy that served the cavemen well for millions of years, but it will kill your trading profits. Work on erasing that mindset and process data like Mr. Spook on Star Trek. Just look at the cool clear logic of the situation. Don’t over trade. Don feel you just “have to do something”. Most of your profits will be made doing nothing, or letting your profits run. Most of your losses will be avoided by doing nothing, or not entering a questionable trade. There is only one situation where you need to act fast and decisively and that is when you are cutting your losses short. When a trade isn’t following the story you have laid out in your head for it, and you incur your first loss in it, then there is no room for hope. Abandon all hope ye who enter here into the Forex market. Cut your losses fast and look for a trade that goes with your plan. But in the cool logic of trading, this one is still working, you have profit, so the rule is, let your profits run.
The third pic looks bubbly, but we have already convinced ourselves that PA is more sausage like. There is a Tymen system entry, but should we take it? Look at the long pin top on the last green candle in the third pic. It’s a seed of doubt. I think Tymen will have more to say on this, but generally, bubbles turn into sausages, sausages rarely if ever turn into bubbles. So I think if we had decided in pics 1 & 2 it was a sausage, it was a sausage, it is a sausage, it will remain a sausage, unless it is conclusively prooved otherwise. I wouldn’t consider pic 3 conclusive proof, so it’s still a sausage. Pic 4 just confirms that. Once a sausage, always a sausage. But bubbles can be turned.
Of course, if you had traded the whole sequence per Tymen’s method, you would have made major pips on the OBB PA in the first pic. And even if you didn’t recognize it’s unbubbly behavior and exited early, which now I hope you see would clearly be a mistake, and took the entry in the third pic, you would have a small stop out. So in the end you would be even or a little ahead. Tymen’s system is very forgiving, but you must think like a trader, not a caveman, to make the most of it.
So there are three good reasons to trade this as a sausage and stay in the trade to ride it to even more profits:
One, to do so, you don’t have to risk any of your trading capital, only profit. Get ready, here comes a HUGE realization. Even though profits and trading capital look the same, they are WAY different. You can never blow out an account risking a part of your profit, no matter how many bad decisions about doing that you make. You CAN blow out an account risking your trading capital if you make enough bad decisions. This difference is HUGE!!! Think about it, and then think about it some more. Trading profits and trading capital are NOT the same. They should be treated differently.
Two, if you thought this was a sausage, then it will always be a sausage. It won’t change back to a bubble later. After you have considered the opposite case completely, which you should always do, have the courage of your convictions.
Three, the trade has already moved a long way in your favor with much PA outside the lower bb. A short pull back is now expected, so this trade is really following a very logical sequence, one that you can plan for, rehearse in your head so it isn’t frightening. Don’t be afraid. Don’t be greedy. Fear and greed are the profit killers. Be cool, calm and logical and let this trade come to you.
That’s my analysis of your graphic. Take what you like and toss the rest.
Happy Trading
Sorry, I was typing and didn’t know Tymen was back. WELCOME BACK!
I 'd like to see that!!
:eek:
Wow!
Thank you so much gravitation!
How many details you see right from the start. Incredable!
Im starting to see it also!
Your analysis was so interesting to read for me that i got into trouble with my boss because he noticed i wasnt really focusing on my actual work 
Too good he supports me a little in learning the forex.
Bottomline: Thanks so much! Gave me so much more insight! I couldn`t have asked for more!
Good for you, [B]NForex[/B].
The good thing about experienced traders like [B]Graviton [/B]is that they catch on quick!!
Now I wonder where [B]Kockneerebel [/B]and [B]Master Tang[/B] have gone?
Tymen, just trying to keep things on track while you were away. I do hope you have lots of help for your move and things are going well. I can have two strong movers and a nice lady who will arrange things show up at your front door at first light. If you need it, just say the word.
Please give us some more nuggets to ponder about trading your system, please?
I’ll set aside my hurt over not being acknowledged as the only participant who replied correctly and just lament that we must wait even longer to get the rest of the info… (sigh).
Since none of the other strats I use has ever amounted to much I will start trading this next week with at least as much as has been explained so far. I simply can’t wait another month or so to get trading; hopefully I’ll do well enough to profit, then simply refine the system as it’s revealed over time.
Thanks, Tymen!
I will openly acknowledge that you were indeed the only one who gave the correct answer!!
Good on you!!
Since none of the other strats I use has ever amounted to much I will start trading this next week with at least as much as has been explained so far. I simply can’t wait another month or so to get trading; hopefully I’ll do well enough to profit, then simply refine the system as it’s revealed over time.
If you wait until the middle of next week I will post some more of the essential rules.
They will help you greatly, especially with regard to knowing how to handle the BB sausages.
Since you answered the exercise correctly, these rules could become your strong point!!
Waits patiently Actually, patience has never been my strong point, so I could probably use the practice at it.
That is a very interesting perspective, Graviton.
I think the main difficulty for me will be deciding whether we have a sausage or bubble when it has begun forming.
