Sure Tentoerun - see below / bet we get differing results on this…!! as mentioned i havnt completed a target study - have just noted max pip runs so far to see if its worth taking further - lets know what you get - risk is based on stops at highs and lows of move as per strategy so far
a. 146risk / 375 gain (still running) [I] long[/I]
[B]b. 26risk / 60 gain [I]short[/I][/B]
c. 58risk / 30 gain [I]short[/I]
[B]d. 51risk / 229 gain (still running) [I] long[/I][/B]
[B]e. 51 risk / 90 gain [I] long[/I][/B]
f. 120 risk / 57 gain (still running) [I] long[/I]
[B]g. 64 risk / 83 gain [I]short[/I][/B]
h. 118 risk / 51 gain (still running) [I] long[/I]
i. 99 risk / 68 gain (still running) [I] long[/I]
j. ??
Let us know what price your entry point came out to.
I got it drawn that date, for a short at 1.5221.
I’m going to go out on a limb here, and make a point. There has to be an attractive r/r ratio.
If the entry was a 1.5221, the first target was at 1.5184. That’s 37 pips. 40 if you push the t/p line a bit.
Now here’s the problem, the stop loss would have been at 1.5298.
76 pips to get 37. So we have an inverted r/r. Instead of a 2:1 r/r, we are at 1:2.
Target 2 would have been somewhere around 1.5126, and it touched it just barely on the 6th, but that was AFTER it retraced all the way back up to the s/l zone.
But again the problem is the pip value for the risk involved. Target 2 would have been 90 to 95 pips depending on where you drew your s/r line.
Although it is a better r/r scenario, it is still almost pip for pip. And in this case, if you had held out and not exited at t/p 1 with the +35, you would have lost the trade.
I’m sure Tymen will have a better way to handle this, but before you pull the trigger on any trades make sure the risk you are taking is worth pulling the trigger on:)
Aha! I didn’t realize that you were referring to drawing your CBLs on the H1. And, I see what you were talking about. Thanks.
Although there has been some discussion about using the H1 charts, we haven’t heard from Tymen on this. His summary has been focussed on just the H4 charts. It’ll be interesting to see what he has to say when he returns.
i have been demo ing this system for the last week or so and have been making consistent pips. From my limited experience you need to be conservative where you put your SR lines and maybe perhaps draw your first TP1 line from your 1 hour chart instead of the 4H. It seems risky also if the CBL is too close to the first TP1 line therefore perhaps one should think twice before entering(Use trend bias perhaps). What about drawing CBL on 30 min chart (i know Tymen1 stated otherwise) instead of the 1H if the first TP1 drawn on the 4H is too close to the CBL drawn on the 1H?
thanks Tymen 1 for your continued kindness and dedication. Hope Melbourne is working out ok:)
As always I am sure Tymen on his return will have much to add.
First let me refer all to Tymens post #1461 with regard to drawing S/R lines
There also seems to be some concern about The CBL’s being close to TP 1.
If we are drawing CBL’s on the approach to S/R on the 4hr chart, when we dial down to the 1 hr, that same S/R will appear and could be mistaken for our TP1 and thus be to close. The I hr chart is only our timing chart and used for entry, Please be mindful not to confuse this line with the TP1 and TP 2 ( S/R) lines on the 4 hr chart, which is our home chart and used to manage the trade
I used the CBL for the first time yesterday to take a trade. I went long on the EU/US at 1.3342 but this morning at about 4am PA looked like it was going down so I closed both trades with small profit of 20 pips each. I should have kept the open because PA has moved a further 60 pips upwards. (I’ll try to post a chart but I’ve had trouble in the past of trying to do this.)
I hope Tymens exit stratagies are as good as the rest of his teachings as this CBL entry really was a good trade.
Forgot to draw these, so I’ll add them now. Well, only the first one is showen on this close up chart. PA did reach it but as a newbie making the classic schoolboy error, I closed out way too early - scared that price would turn.
Back again for a few posts while the electrical wiring is being done on my new home.
I have read all the posts carefully from some time back and I have good news.
All the work everyone is doing is basically just practise.
Practise for what is to come.
This is all I can get you to do while I am away.
[B]We are nowhere near the final method yet.[/B]
Those who are participating here have the clear advantage - you are learning by experience!!
All the hangers-on who are just reading this thread are getting none of the practical benefit and experience needed to competantly trade the finished system.
Who has the greater benefit is learning to play a guitar - a person who learns just from reading a book or somone who not only has the book but also a teacher who teaches then how to play from the book?
So it is here - those who participate are discovering all sorts of things including their own levels of confidence and ability to withstand pressure.
[U]None of these things are available to the watchers-only.[/U]
So I say to all of you who are reading this thread and not participating - get off your backside and give your demo account a solid workout.
You will reap many benefits in doing so!!
[B]Recently we appear to have identified a number of things…[/B]
The SR lines appear to be very subjective - one is tempted to put them far away from the TP1 position so as to maximise profit, even if the line is not really a good one.
The risk, cut down on the1 hour timeframe, still appears to be large.
[B]Merchant Prince[/B] has in particular lamented at this - I have good news for him ahead!!
Although the wins seem to be reasonable, the losses are coming in too frequently and could well put off a new trader.
[B]An entirely new approach is about to arrive!![/B]
(surprise!!)
The present work was to get you to be familiar with the workings of the CBL (which stays), and the operation of the 2 contract trading method for money management.
The SR lines give practise on vigilance.
[B]I am in between moving work and posts - I will post as I can in the next 24 hours.[/B]
We are about to embark on the use of any timeframe to give a risk that suits the particular trader.
We are going to compare the abilities of the SR lines vs the Bollinger bands regarding the price action analysis and setting of the CBL.
Even in our naked trading, it looks as though we are going to need one indicator to guide us - not tell us what to do as in say a MACD or stochastic, but just a guide.
We are looking to use the Bollinger bands as a substitute for determining SR levels.
The BB do an excellent job at showing up extreme points, and they do this without all the subjective feelings that we may put into our SR lines.
Here is a CBL with the SR lines in color and the BB overlaid.
Without the BB, you would start to consider your TP1 exit at the yellow/white border.
But with the BB, you can see the outer bands expanding at this point, going for a bubble or sausage.
(see, we have not wasted our time learning this - there is a sequence to my curriculum!!)
So with the BB, you would not bother with this SR line at all.
Instead you would wait until the black vertical line when the opposite BB begins to contract.
This is the same point at which the yellow/blue SR line appears!!
So, not knowing yet whether this is going to be a bubble (price retraces firmly) or a sausage (price regains strength downward), we could put a TP1 at this point.
After this point, the price action retraces, but a few candles on, we see the price action re-testing the yellow/blue SR line for the 2nd time.
The opposite BB also has a very pointy shape to it, unlike our familiar bubbles with their sexy round “behinds”.
Ah ha!! - a sausage!!
Knowing that we have a sausage, allows us to ignore the test and re-test of the blue/grey SR line and go for a much better profit down in the grey zone.
So this chart with BB overlay shows that the BB appear to do a better job of instilling confidence in where to exit.
We are about to embark on the use of any timeframe to give a risk that suits the particular trader.
We are going to compare the abilities of the SR lines vs the Bollinger bands regarding the price action analysis and setting of the CBL.
This is very exciting news! Despite my forays over the past two weeks into naked trend trading (I have read many threads and e-books on trading this way) I too found that the one indicator I still cannot do away with (in any TF) are the Bollinger Bands. I am thrilled to learn I have not been far off from the direction you’ve been leading us all along, my friend.
John (Merchantprince)
[I]“Nobody can be exactly like me. Even I have trouble doing it.”[/I]
input from the sidelines
No such thing as trading without the bb´s:D!
One thing about the ultimatecandlestick was that price, when going outside bb´s, usually found/hit/encountered whatever, some kind of S/R! But you couldnt see it, but feel it, hehe. A firmly drawn line, if placed corectly (:p) with the bbs make an excellent confirmation on entrys in my book. I Use Pivots myself as an extra tool, plus the previous daily high/low. Some markers:
precalculated pivots <—
fibs <-- must know how to draw properly though.
Yesterdays highs and low <— not hard to draw!
And it all coming down to selling high and buying low in accordance with the bbs (preferably outside the bbs @ extremes greedo:D! Thats what i do:).
When one realises that trading is about probabilities and that the BB work with statistics (standard deviation) or probabilities, then eveything falls into place.
One of my references cited at the beginning of this thread, Philippe Cahen, author of “Dynamic Technical Analysis”, uses BB bubbles and sausages (he uses different names) to produce a working trading system of his own.
[B]Simbafx[/B], who has posted on this thread and sent me a PM, also vouches for the quality of this book.
It is recommended reading.
Whereas the SR lines tend to be restricted to the higher timeframes (weekly, daily, 4H), the BB can be used on any timeframe.
Using the BB allows us to set stop losses more pleasing to the smaller trader.
