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Beginner Questions
1139

[B]So far using the stochastic we can conclude…[/B]

Using the stochastic is an excellent method to exit on a clean BB bubble.

If using hindsight, we cannot see a clean BB bubble forming, we should avoid using the stochastic to exit.

Alternatively, we could use the stochastic all the time by trading with [U]2 contracts and using the break even method.[/U]

This method is explained in the following hyperlink…

http://forums.babypips.com/analyst-arena/12562-using-multiple-lot-positions-improve-trading-fx.html

Using 2 contracts, we would exit the 1st contract on the 1st stochastic crossover. (small target profit).
The 2nd contract is exited at the 2nd crossover. (main target profit).

Of course, if we started with 2 contracts and entered immediately into a clean BB bubble, then we would exit both contracts simultaneously or use another strategy.

[B]Some of these ideas will become clearer when we consider the other exit methods for comparison.[/B]

1140

like you said tymen: stochastics always get saturated too fast… so why not use them in a higher TF from the one we use to enter?

1141

the case of a clean bubble is extremely rare :slight_smile:

thank you tymen, would you please type the parameters of the stochastic indicator for each time frame? I would like to make a test …

1142

Tymen I note that you have used, on a number of occasions, the phrase ‘clean BB bubble’. What would your definition of this be?

Also would this be recognised at the outset (at the time of entry), or only with hindsight?

Thanks.

1143

I think clear BB is an empty Bollinger bands bubble when the price walks outside the Bollinger bands bubble or the same is outside the Bollinger bands :slight_smile:

1144

Thanks RenaLa for your thoughts on this: I had not previously met the phrase of ‘clean BB bubble’.

1145

I didnt hear also, but if you see inside the bands in case of ‘clean BB bubble’ you will recognize that the bubble is empty (candles outside the bands)
this is fast price movement :smiley:
I guess it came from one of the books he has read (look at the post # 4)

1146

quick question tymen…i understand that drawing trend lines to determine your trend bias on the weekly time frame can be subjective at times(of course you want the line to touch as much of the price action as possible) however how many candles on your weekly time frame do you take into account when plotting trend lines?
Your dealbook screen shot of the three timeframes showed 7 candles on the weekly chart if i remember correctly.? thanks again.

1147

Actually I had a similar question. Is it possible to look at the trend direction of the MMACD on the higher time frame to determine which way the higher time frame trend is heading?

1148

Here’s a quote from Tymen’s post #1043:

[B]For a clean BB bubble…

…if one of the outer bands expands with the price action walking that band…

…then the opposite band will expand also but then suddenly contract when the price action ceases to walk the band.[/B]

Post #1043 includes a diagram. Here’s a link to it — 301 Moved Permanently

1149

Thank you Clint. I had been ‘speed reading’ to get to the end of the thread and somehow missed the definition of a clean BB bubble - ‘a senior moment’!

Thank you also RenaLa for your help.

1150

I don’t see Tymen’s comment in 1043 as a definition. And, as for the bubble being “clean”, clearly in #1044 the prices are NOT outside the bubble. Count me among those who are looking for clarification on the term.

1151

Not sure what you’re getting at, here.

I didn’t use the word “definition”, nor did Tymen (for whatever that’s worth).

I didn’t say anything about prices being outside the bubble, nor did Tymen.

It’s clear that the chart in post #1044 shows exactly what Tymen described: “price action walking the band”.

Is there some issue here that I’m completely missing?

1152

hi,
look at the long trade. For me it’s the price action walking the band but the bubble is not clear.
You can compare long trade and next short trade

1153

Lets try that - after I finish with the clean bubble description. :slight_smile: :slight_smile:

1154

Clint,

Thanks for your comments.

I would LIKE a definition - or, at least, some additional clarification on the meaning of the term. Yes, of course, neither you nor Tymen used the word definition BUT your post was a response to Ken doubleu’s query in which he specifically ASKED for a definition so it appeared to me that you were providing Tymen’s quote AS IF it were a definition.

I apologize for misreading your intent.

1155

It is clear from the above posts that there is confusion - about the “clean BB bubble”

By [U]clean[/U], I mean without interference from any other price action that may distort the shape of the bubble.
By [U]bubble[/U], I mean the shape that looks like a bubble.

These shapes are extremely common and we need to be very familiar with their shape and properties so that we can recognise them when they form.

You cannot predict a clean bubble but you can recognise it when under development.
You do not have to wait untill it is complete before recognising it.

To clarify matters and remove the confusion, I am going to post examples.

1156

Here is an example of a clean bubble >>>

1024×640

Isn’t she cute!! :smiley:
Very sexy!! :smiley:
We should give her a name!! :stuck_out_tongue:
I suggest Rachel.

She is rather naked right now - I think we should dress her up!!

Lets see…

NEXT POST

1157

First dressing!! :smiley: >>>

1024×640

The box has 2 colours - green/blue.

The division occurs when the opposite BB starts to contract.

This will become clearer in the next post.

1158

Here the price action has been added >>>

1024×640

You should have been able to tell from the previous blank charts that the price action was going up.
You can tell this from the rising mid BB.

The division point is now clear and you can see the price action pulling away from the upper BB in the blue section.