Your charts will be very welcome and give us a chance to analyse what you are doing.
What I find the hardest is validating chart patterns and setting profit targets, I often exit on the bottom stark band (when going short), but I could have run with the trade much longer and made a bigger profit.
With your chart postings, we will be able to help you master this problem!!
First impressions of what you say suggests a need to recognise when the starc bands are going on a roll downwards, or climbing a hill upwards.
Can you find the previous morning doji star on the lower BB?
Now have a look at the end of the chart.
We see a powerful long engulfing pattern (highlighted) telling us to trade long, and yet, the mid BB is going down.
As before, the whole trend is strongly downwards.
The price action is following the engulfing pattern is strongly up, and using the Basic level would have netted a nice profit.
However, I expect this rise to be temporary, as the mid BB will āwin outā in the struggle.
We cannot always predict the degree of price action moving with the pattern if the mid BB goes contrary to the pattern.
Again, these are unsafe trades.
Yes, you could win them.
But you could just as easily lose them.
[B]Letās not gamble!! [/B]
Keep the mid BB in your favour, or at least, level.
If it is going against you, then see potential for it to reverse direction before embarking on a trade!!
[U]Finally, rememberā¦[/U]
Two patterns opposing the trend are generally needed to break the trend.
[B]The general formula for these types of trades where the mid BB opposes the candlestick pattern seems to beā¦[/B]
The price action will first immediately follow the direction dictated by the pattern.
The end result is that it follows the direction of the mid Bollinger band.
How much the price action goes initially in favour of the candlestick pattern remains an unknown.
[B]And for that reason, these trade senarios are dangerous to enter!![/B] :eek:
I have two perfect charts from todays trading to illustrate what I mentioned as troubles in my last post.
The first chart is from EURUSD today. I get an engulfing long pattern. What do you guys think about this, is it valid?
I figured it was valid and the start of a new trend so I went long and here comes the five minut chart. The first arrow is my entry point and the second my exit point. A nice little retrace trade. BUT, look at what happens next, it continues to roll upwards and I am already out of the tradeā¦the trade could have been much more profitable!
How can I now when I am on a roll, i.e. when I shouldnāt exit on the top Starc band? And when should I exit?
I know youāve probably answered this before, but I couldnāt find itā¦ What exactly is the difference between a STARC band and a Bollinger band??
People here seem to be using the names interchangeably. Iām not much of an indicator person so I was just wondering if they are synonyms for the same thing or if thereās a difference between them??
Well, when you are going short, you enter at the 0,7 upper starc and exit at the 1.0 lower starc. Shouldnāt it be the exact opposite when going long?
What I am after is really the rule; how can I know when I am on a roll upwards or downwards and therefore should wait to exit? Is it the inclination of the starc lines? When they are sharply in one direction I stay with the trade?
Tymen1 charts are BB not STARC bands in his pictures.
BB and STARC are not the same, but he is using them sometimes together to get a trend.
His post points out the importance of the middle line of the BB in relation to candles.
Please take away the grid when posting charts, grid is so annoying in a picture.
Happy Trading
Edman, when you, or anybody else is on a roll itās called gambling and therefore nobody knows when to greed or common sense starts or ends.
I donāt agree with you, itās true that the Tymen advanced method (which I am talking about here) uses BB and candlestick charts for the main charts (20min-1 hour), to find a good and valid candle stick pattern. But for the entry and exit of the trade the 5 min charts are used and on this chart the Starc bands are used.
On Tymenās chart, Could we have treated the engulfing pattern or the doji star shown as a retrace even though it is close to the lower bollinger band?
OK, a lot of posts and questions since my last post.
I have been dealing with that poster, Herbie, who I am pleased to say, has now been banned.
He returned under an alias and had a fight with the great poster, Clint.
I am sure that was the last straw for the Administration.
Unfortunately, it is my experience, as a trade veteran on this forum, that banned posters usually try their luck by returning under new names.
They continue to do this until us Honorary FX Members band together and run them out of town.
Now that we are free again, and at peace, I will answer the questions in order of appearance.
In the situation you describe, the idea is to get a bearish (short) pattern on the upper BB.
This would then be traded downwards towards the mid BB.
Any further past the mid BB is extra pips.
The principle is to get shorting patterns on the upper BB and long patterns on the lower BB and trade both into the centre.
This is so because of the mathematical construction of the BB - the outer bands are extreme standard deviations of the mid BB which is the norm.
I tried it on GBP/USD today and it paid off. But I am concerned about the longevity of such action.
A bearish signal on the lower BB is something you [U]would not trade[/U] because it violates the trading principle I explained above.
In the situation you describe, you would be looking at a 3 red rosellas pattern.
These have, of late proven to be somewhat unreliable and I have advised against trading them.
Your concerns here are very valid.
It wont be possible to call up Jayce but what should I write up in the mail while asking for a demo Dealbook Platform?
Introduce yourself, where you come from, and [U]tell Jay that Tymen sent you[/U].
Ask him to send you and email from which you can download the Dealbook program and [U]do so indefinitely[/U].
Ask him to include the necessary passwords.
Ask him also about bank funds information for you prospective live trading.
Ask him to send you the neccessary documents by email to open a live account.
Ask him also to send you further information about Kinetic Securities.
You may find it helpful.
The answer to your problem is fortunately quite simple.
The rule - exit on the outer Starc band, is basically for level starc bands.
Your bands are certainly not level, they are going steeply up.
[B]Whenever the starc bands are going steeply up or down and the price action hits the relevant outer starc band, we ignore that exit!![/B]
[B]Instead we postphone it.[/B]
We [U]wait instead[/U], watch the price action walk the starc bands and wait until the starc bands start to turn around against the trade.
It is at that point that we exit.
This point can be seen near your second arrow (pointing up).
Your exit point would be around there.
The exact point is not important.
At this point you can see the starc bands pulling away from the Bollinger bands.
[B]When the starc bands go steeply up or down, there are several stages we must watch out for to be able to predict when the starc bands will turn aroundā¦[/B]
These stages areā¦
The Starc bands are seen to be going steeply up or down.
[U]This is our signal to postphone any exits.[/U]
2)The Bollinger bands will [U]expand [/U]- breakout.
The Starc bands will start to [U]run alongside the Bollinger bands[/U] going up or down.
The price action will [U]walk the relevant outer Starc band[/U] and possibly also the relevant outer BB since the two band types are running together.
The Starc bands will [U]pass to the outside[/U] of the outer BB.
The Starc bands will cross over and [U]pass to the inside[/U] of the outer BB.
[B]7) When the Starc bands cross over, it is the signal that the bands are about to change direction.[/B]
So at this point you should be very prepared, vigilant and ready to exit promptly.
Sometimes the price action changes very greatly at this point, so much so as to kill any profits!! :eek: :eek:
[B]Vicky [/B]has done a nice job at answering your question but I will try to add a few points.
Firstly they are definitely different indicators.
Not really indicators, but rather [U]probability bands[/U].
The Bollinger bands were invented by John Bollinger.
As vicky states, the mid Bollinger band is a 20 period simple moving average.
A moving standard deviation is then calculated.
Each outer band is not one standard deviation out but rather, two.
The Starc bands were invented by Manning Stoller.
It uses a 6 period simple moving average.
A 15 period ATR of the price action is then calculated and this is added and subtracted from the moving average to give the two outer bands.
The Bollinger bands are much wider than the Starc bands and the Starc bands go up and down inside the Bollinger bands.
We can therefore, predict the turning points of the Starc bands because they bounce off the outer Bollinger bands.
Starc bands are great for trying to predict upper and lower price actions.
They look almost the same but they are not the same.