If you missed the entry you should not be trading that trade!! :o :o
What kind of trading method is this?! 
Hmmmm
Before giving answers I think I should wait for more participants. 
Just one important point…
Whether the BB pattern hits the K or P points has [U]nothing to do with its classification.[/U]
The classification depends [U]only [/U]on whether the price action continues to walk the BB [U]after [/U]the opposite BB starts to contract.
[B]If the walk [U]ceases [/U]after the contraction - bubble.
If the walk [U]continues [/U]after the contraction - sausage.[/B]
Of the 3 of you who did the exercise, none got it fully correct.
Upon reading this post, you may want to try again. 
I think this is a bit like drawing trendlines, where people can see slightly different things.
Here are my answers
Bubbles - 1, 2, 5, 6, 8, 9, 10
Sausages - 3, 4, 7
My answers are,
1 – Bubble
2 – Bubble
3 – Sausage
4 – Sausage
5– Sausage
6 – Bubble
7 – Bubble
8 – Bubble. However initially it was sausage like until the PA touched the lower band when it turned into more of a bubble.
9 – Bubble
10 – Sausage. However it was bubblelike upto the point when the PA was walking the lower band, then the 1st horizontal PA turned it into a sausage.
While I am waiting, I will go thro the exits on the examples I have shown.
example 1 >>>
The exit here uses a simple method, without indicators.
We simply look for the 1st candle that is completely free from the BB.
There are 2 choices and either would be appropriate and give you a nice profit!!
Since this is a bubble, here is the same example using the stochastic exit >>>
Note that the stochastic exit would give you the same green candle as the simple method. 
WOW! Tymen, you sure picked up the pace. I was gone for 48 hous and I came back to almost more than I can READ let alone DIGEST in the little while remaining to me today. I hope you do create a PDF before moving on. There is SO MUCH valuable info here.
In any case, I’ll be gone 'til the first weekend of April. Hope your move goes/went well.
Good trading to all.
RenaLa, Are you using the term BB & bb correctly? They stand for Bollinger Bands. It sounds like you are meaning bubble.
The next example is a BB sausage.
example 2 >>>
This is a messy set of exits!! 
The exits candles are shown in the blue boxes.
There are re-entry candles which are shown by the little blue lines.
There are 5 exits/re-entries in this chart.
They are numbered and labelled with black lines showing the exit and re-entry.
This is how it works…
[B]1) We wait for the candles to touch/pass thro the BB - preferably for the body of the candle to pass thro the BB as well.
-
We then exit on the 1st candle that is completely free of the BB.
-
We then re-enter when the price action drops (short trade) below the exit point.
-
We go back to STEP 1 and repeat the process.[/B]
This goes on until there is no further drop in price action.
Note that the last re-entry and exit actually gave us a loss!! :eek:
Let us now look at the same above example using the parabolic sar.
Remember, it is a BB sausage >>>
The parabolic sar gives us one clean exit - no need for messing around.
This is great stuff, love the exiting off the first candle departing from the outer boll, then setting a trade in the original direction when price comes back to that point. It gets the most out of the initial trade, whilst allowing for the possibility that price action could once again move back in our original direction.
Let us now look at example 3 - a BB bubble >>>
We have a tandem here.
Again both exits are in the blue boxes.
There are 2 candles shown in each box - depending on how quick and astute you are, either candle is good for exiting.
(assuming you did a re-entry, you would exit the 2nd bubble at the 2nd blue box).
Note that by now you can see that the bubbles give cleaner exits - hence the term “clean BB bubble”.
The exits on the bubbles are more straightforward and there is one exit only.
(OK, there are 2 exits here, but that is only because we have a tandem!! :D)
We don’t know if the exit candle, such as in 2 & 4, is going to be free of the BB until it closes. So the exit point would be at the top of the body of the candle, but the entry shown is at the bottom of the body of the candle. You said the re-entry point is when the pa is below the exit point.
Am I misunderstanding something here?
Lets now look at this tandem using a stochastic exit >>>
The blue vertical lines show the stochastic crossovers in the oversold area.
The exits are excellent, being shown as the first candles after the blue vertical lines.
[B]I will answer all the reply posts shortly but this one is very important and I have not edited your question.[/B]
So the exit point would be at the top of the body of the candle, …
That is exactly correct - as you said, you cannot know until the candle closes. 
but the [I]re-[/I]entry shown is at the bottom of the body of the candle.
Please note - “re-entry” not “entry”.
[U]Yes[/U], the re-entry is at the bottom of the exit candle.
This is because we are going [U]short [/U]and we want to be [U]sure [/U]that the price action is going down.
Taking the re-entry from the [U]top of the exit candle[/U] would be no assurance of price action continuing down whatsoever!! :eek: :eek:
To be [U]absolutely sure[/U] of price action going down, we might even want to re-enter a few pips [U]below [/U]the bottom of the exit candle!! 
Bubble - 1,2,6,8,9
su - 3,4,5,7, [B]10[/B]
we need pdf Tymen bcos there is lot of valuable information
Thankyou
Lets now look at example 4 - a bubble >>>
2 exit candles are shown in the blue box.
.
Now you would have to be a bit slow in your responses to exit on the 2nd candle, but since we are going long here, the 2nd exit candle is the better exit!! 
How would a stochastic exit go in the above example? >>>
Hmmmmmm.
Not so good. :eek:
A late exit with no stochastic crossover in the overbought area, leaving us to exit when the K line leaves the overbought area (see chart).
Our simple exit method with no indicators, is shaping up to doing a great job on the BB bubbles!!
Now we go to example 5 - a BB sausage.
Lets apply what we have learnt so far here.
In this case I have trimmed the fat off this sausage (enlarged the chart) for maximum clarity!! >>>
There are 4 exits.
Lets go thro step by step according to the rules …
-
We wait for the price action to touch/pass thro the BB.
-
We exit on the 1st candle that is completely free of the BB.
-
We re-enter when the price action rises above the high of the exit candle (going long).
-
Repeat 1 - 3 until no further rises are experienced (number 4).
If you examine the chart carefully, you will see the exits in the blue boxes and the re-entries shown by very short horizontal blue lines.
Unlike the BB bubbles, the simple method without indicators is messy on the BB sausages!!
OK, lets try exiting on the previous BB sausage chart using the parabolic sar. >>>
Again, by projecting the parabolic sar dots forward, we get a clean exit.
The parabolic sar serves as a trailing stop, locking in your profits as the trade progresses.
However, it appears that the simple exit method makes more pips profit in the long run.
Compare the parabolic sar exit with the simple method exits in the previous chart.