You are suggesting looking at a higher time frame?
I can FEEL the answer but I do not KNOW the answer
That’s OK.
This sometimes happens!! 
according to Japanese Candlestick Charting Explained - FX Words Trading GlossaryFX Words Trading Glossary combination of candles is reverse pattern or continuation pattern
from your point of view what’s the difference? I’ve confused 
anyway I cant recognize them on the charts.
sorry for confusion
I think what we are lookin for are retracement candles, ie two candles together that are in opposite direction of the trend we are trading
Sounds like great logic here!! 
88% to 89% of all price action is within the BB when you use 2 standard deviations as has been done here.
Therefore any price action above these bands is a bit of a stray cat!!
However, when the mid BB favours these price actions, they will then walk the bands and hence stay outside the bands.
In that case you would make a roaring profit!!
This is exactly the tactic Philippe Cahen uses in his book - Dynamic Technical Analysis.
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.
The yellow areas were really the end of an outer BB price action walk.
You would be able to see this from the previous sections and hence your rejection of these areas is logical.
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 light blue area had the candle only touching the outer BB.
Maybe we can include this after all.
The grey area would have made us a definite loss no matter which way we looked at it.
So yes, we reject it for the same reason.
[B]I like this whole idea but we need to look at it further.[/B]
oh, I see thank you
Stay with us, didilut. 
You are most welcome!!
boiler bands, [B]nothingbutbull[/B].
NO no…[B]Bollinger Bands!! [/B]
John Bollinger in his book, [B]Bollinger on Bollinger Bands[/B], states that 2 standard deviations were generated because that allows 88 to 89% of all price action to be within the bands.
This was found to be true for every type of trading commodity.
In order to maintain this ratio, a 10 sma needs a 1.9 standared deviation and a 50 sma needs a 2.1 standard deviation.
When going below 10 or above 50, it is better to go to another timeframe.
So on that basis I think we can say with fairness that price outside of the 2 standard deviation is an extreme, being part of the 10% of extreme price.
The MMACD is in the direction of the trend.
The yellow areas were in the direction of the MMACD trend (up).
But we still get losses (yellow areas)!! :eek:
Look again at the charts in this whole thread, [B]iCarumba[/B].
You will find 20 min, 40 min, 1 hour, 4 hour and daily.
The last series was daily because that is what most people trade.
on average, how long is 1 trade is for you?
That depends on which timeframe I use.
We will look further at this.
You believe we are gambling but you are still here? 
I did not re-enter because it is only and example and it was late at night.
Yes I could have re-entered and I would have been thrown out again by the final 2 red retracement candles.
Sorry to confuse you, RenaLa :o
I may have confused others as well. :o
The word I should have used instead of reverse candle is retracement candle.
We wait until the candles touch or cross the outer BB, then we watch.
Sometimes there are retracement candles which pull the price action away from the BB.
We wait until we see 2 retracement candles in a row.
Two in a row means we exit.
We can re-enter if the price action should return to the close of the 1st retracement candle.
In the chart below >>>
We see 2 red candles where the letter X is.
The 2 red candles are retracement candles.
These take the price action away from the upper BB.
Just a little further we see 3 red retracement candles.
There are many times when there is just one retracement candle.
They cannot be used as a signal for exits because the price action just keeps on going again.
But 2 retracement candles is a serious exit proposal - and that is what I have used.
tymen, I am not sure what is 2 standard deviation, is it the same that lower and upper bollinger band?
We agree that, once the price reaches an extreme - whether defined by BBs or another measure - in most cases it isn’t going much further. Although, as we have all seen, it is not exactly rare to see that price continues to levels WAY OUTSIDE the extremes defined by two standard deviation BBs.
re: …Bollinger on Bollinger Bands[/B], states that 2 standard deviations were generated because that allows 88 to 89% of all price action to be within the bands.
Well…strictly speaking, and given a normal distribution of the data, two standard deviations will encompass 95.4% of the data. Part of the problem, of course, is that price is NOT usually found to exhibit a normal distribution- especially not within the 20 or so data points usually used to calculate the BBs. Perhaps his 88-89% figure was based on his experience with real data.
re:… I think we can say with fairness that price outside of the 2 standard deviation is an extreme …
Generally, with exceptions, i would agree.
Yes!!
The upper and lower BB are 2 standard deviations (sigma) away from a 20 period simple moving average which is the mid BB.
[B]A great thank you to all who took part in the exercise.[/B]
It is this sort of active participation that really makes you learn things!!
We will now look in detail at the proposals mentioned…
-
The 200 ema.
-
A longer timeframe.
-
The BB trend.
Tomorrow!!
thank you tymen,
hope that we get closer to the “great surprises”
Hi RenaLa, can you post an chart, not sure to understand well ?
cheers
Greg
could also look at center bb line. compare it to a clock face. 3:00? stay out. 2:00 look for longs, 4:00 look for sells. 1:00 or 5:00 your’re probably too late, missed the bus.
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