Yeah, it seems like most of the unprofitable long trades are taken when the red guppies are clustered and moving laterally. But it seems like the trouble with using that as a filter limits us because a lot of the profitable short trades begin with the red guppies slightly clustered as well.
Since we are trend trading, I feel like we should only be trading in direction of the trend, i.e. only taking shorts in the above charts. How do we know the bears are in control? Looking for the guppies to be stacked and falling in a higher time frame could confirm a bearish trend, but even that is subjective and open to interpretation. I can FEEL the answer but I do not KNOW the answer
The losing trades on this chart share one thing in common: entry LONG at or above the upper BB. This is generally a bad idea.
Think of the area above the upper BB as “overbought territory” — not a good place to enter a new LONG position.
Conversely, think of the area below the lower BB as “oversold territory” — not a good place to enter a new SHORT position.
All four of the yellow shaded trades should have been rejected, based on where PRICE was in relation to the BB’s at the time of the MMACD signal.
Rejecting all four “yellow” trades would have added 653 additional pips profit to the trades displayed on this chart.
To be consistent, the “light blue” SHORT trade and the “gray” SHORT trade should have been rejected for the same reason, i.e., because PRICE was at or below the lower BB.
The result of rejecting six of the trades shown on this chart: 522 additional pips profit.
I’M NOT VERY MALIN FOR POSTER OF YOU AS BEAUTIFUL GRAPHICS.
ON THE GRAPHIC SEAL, VERTICAL LINE INPUT MMACD MARK AND YELLOW HORIZONTAL LINE OUT SHOW GUIDED BY THE ARROWS AND THE RED LINE OUTPUT MMACD.
ON THE LINE NEXT LINE VERTICAL countered by the arrow, THEREFORE NOT FOR TRADE.
THINK THAT OUR MASTER TYMEN1 OF THIS THING.
I’M STILL SORRY FOR MY ENGLISH APPROXIMATE:o
To add to what Clint said, I agree it the price is already side the boiler bands it really has nowhere to go, what is we add in a another indicator like the Starc or Keltner (Yes, i stole those from your other thread), as a region to enter?
I would say just the center Boiler band or half way down but there where 2 or 3 trades that were above/below that that were still quite profitable so that would exclude too much.
OK…generally, I agree (FWIW) that some indication of OB and OS might be useful. As to whether or not BBs are the best measure of OB and OS…that’s open to argument. In particular, should the BBs be set at 2 standard deviations? 2.1? 2.65? Yes, price proximity to statistical extremes is a useful bit of information but to say that price “…has nowhere to go…” because price has reached a 2-sigma “extreme” is to give BBs more significance than they deserve.
If we can draw some how parallel line to ma 200 through first lower trough? then the crossovers (parallel ma200 line and price action) would be a good points to exit the short trades and enter the long ones?
hmm
thank you tymen, you did terrific charts!!
would you explain for the newbie what is the difinition of the reverce candles? would you mind to mark them on the charts?
Reverse candles are Evening Star, Dark Cloud Cover and Short Engulfing for bear and Morning Doji, Bull Piercing and Long engulfing for the bull patterns.
You know seeing what Tymen1 is teaching me makes me realise that we all have access to all the tools that he is showing us. The difference is that he can wip up a Master Chef Receipe whilst I am trying to make something edible with mud and water!
Agree with some of the earlier posts; LONG positions in a ‘shorting’ trend made the losses. Avoiding these meant looking at price action in relation to the BBs.
