[B]We still have one major problem to overcome…[/B]
Regardless of what we do, picking the location of the CBL is tricky.
Sure it is at the extreme of a trend.
But far too often, after correctly drawing the CBL, we enter only to see the price action reverse on us to hit the stop loss instead.
It does not seem to matter whether we use the SR lines or an extreme on the Bollinger bands - the losses continue!! :eek: :eek:
We need to do something about this.
Our win/loss ratio is absolutely shocking. :eek:
If we can improve the win/loss ratio then we can get our confidence back and also the risk/reward ratio does not become so critical.
We have started with the 2 contract strategy but we now need to do something major.
[B]What will it be?[/B]
The values are unimportant.
There is absolutely no sense in knowing them except that they are Fibonacci retracement values.
You can calculate them if you like.
In the last stage we simply exit when the price action hits that blue line.
[B]Believe it or not, we are coming towards the last stages of this thread.
Lets take stock…[/B]
We are trading trends.
We want to avoid indicators.
We want our method to be easy to understand and use.
We want to have a high win/loss ratio.
We want to have a high risk/reward ratio.
We want our CBL to be on the home chart.
We only want to use one chart.
We want to use any timeframe that we choose.
We want our exit method to be user friendly.
All the requirements that you listed above are the only requirements that come to mind, to create an excellent trading system. I am sincerely grateful that you have given so generously of your time to educate us, and eagerly anticipate the culmination of our work so far.
Unfortunately for you, [B]RenaLa[/B], this stuff here is fairly advanced work.
It is not really suited for beginners. :eek:
You also have a language problem.
[B]Kockneerebel [/B]has done a superb and absolutely brilliant job in answering your many questions, most of which I find very confusing and hard to understand, even though I am a teacher.
[B]The work from here on gets quite tricky.[/B]
Are you sure that you are up to the task?
I am not driving you away, but I would have thought that you would have preferred a simpler thread with a simpler trading method.
You must learn to walk before you can run.
[U]This is not a thread for beginners[/U] - there is enough of that stuff already on this forum.
I do give you [U]fair warning [/U]that from here on you may find the material very difficult to understand.
I make no apology for that.
I am posting a choice system that works.
This system (method) is for dedicated elite traders only, but it requires some years of trading experience to impliment properly.
So if you find it hard going, my advice to you is to bow out now and find something more within your grasp.
If you fail to grasp the concepts and principles described from hereon, you will not be able to trade using this system to come. You will fail badly and [U]lose money[/U] in large amounts.
Finally, I make it clear that I refuse to accept blame for other people’s losses if they use my systems or go by my recommendations.
I simply do not have any control over how you trade, therefore, the consequences of your trading are yours alone.
The real “value” of the blue line (lowest fib line) is that it is a signal that if the price action gets down to it or below it we should think about exiting. If bar closes below it…we then exit.
I’ve been looking into creating better entries since the CBL was first mentioned. I am very much aware that this most likely bears no resemblance to Tymens finished trading method, it is simply something I’ve been looking at utilising his CBL and identifying trends.
Using M15 charts, I’ve created a basic rule set of -
1.) Only trade in the direction of the larger trend.
2.) Only enter long if the last retracement had a higher low than the last low.
3.) Only enter short if the last retracement had a lower high than the last high.
4.) Only enter if you have had three bear candles in a row for a short entry, or three bull candles in a row for a long entry.
5.) Draw fib lines from the CBL entry point to the extreme point of the retracement. Then set a TP point at the 261 fib line.
6.) SL set at extreme point of retracement.
7.) Money management entails calculating 2% account value at risk for the Entry to SL.
This method means a RR ratio of 1:1.66
Had interesting results, but needs a good pair that allows nice trends without massive noisy movements.
Looking forward to seeing how Tymen concludes his method.
All of the above requirements that I stated can be met.
We do need to have something on our chart - even naked trading uses SR lines.
I believe that using the Bollinger bands for detecting our entries is a better way to go, since the BB detect extremes in the standard deviation function.
The BB allow for excellent placement of the CBL if only we could win all the time. :o :o
That is the one big problem we now have - the win/loss ratio.
[B]And it is to that problem that we now turn our attention in another amazing unpredictable way!! [/B]
[B]EXERCISE[/B]
you have 2 trading choices…
Opening a trade going for 100 pips with a risk of 10 pips. (risk/reward = 1:10).
But the win/loss ratio is 50:50.
That is, the chances of losing this trade are just as great as winning it.
Opening a trade going for only 15 pips with a risk of 10 pips. (risk/reward = 1:1.5)
But the win/loss ratio is 98% chance in favour of winning. (win/loss = 98/2).
