[B][U]CHART 12[/U][/B]
>>>
By tymen1 at 2009-07-30
Ahh - better!!
After a hair raising $225 drawdown at the highest tip of that high red candle, the price action is now going the correct way - down.
Shheeeesh!! :eek:
[B][U]CHART 13[/U][/B]
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By tymen1 at 2009-07-30
[B]Yikes!![/B]
Not again!!??
Look at those starc bands going up (the wrong way).
But this time we have one thing going for us - the mid BB has turned down as can be seen in the chart!! 
[B][U]CHART 15[/U][/B]
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By tymen1 at 2009-07-30
Now what a big improvement!!
[U]Note the following…[/U]
The price action is going down properly.
The mid BB is now going down.
The starc bands are now going down.
The upper BB is now going down.
[B]Profits, here we come!! [/B] 
[B][U]CHART 17[/U][/B]
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By tymen1 at 2009-07-30
We now have a green candle again!! 
But we need not worry too much here since the mid BB is going down, as well as the starc bands going down. 
[B][U]CHART 18[/U][/B]
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By tymen1 at 2009-07-30
This is a great position!!
In fact it might be wise to exit here.
Even though the candle is not exactly touching the bottom starc band, we are in good profit.
But we consider that, with the starc bands going down - we might be on a roll with the price action going a long way down while walking the lower starc and BB bands.
So we stay in!! :o 
[B][U]CHART 20[/U][/B]
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By tymen1 at 2009-07-30
Hmmmmmmmm. :o :o
Profit gone!!
Still, no need to worry - all the bands are still going down!!
[B][U]CHART 21[/U][/B]
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By tymen1 at 2009-07-30
Yep!!
See…the price action gave our profit back again.
We now wait to see if it goes on a roll downhill. 
[B][U]CHART 22[/U][/B]
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By tymen1 at 2009-07-30
We now notice that the bottom starc band is crossing the bottom BB.
This is now a time to be very cautious.
At any time the bottom starc band could make an upward crossover.
That indicates that the price action will go up and mark the end of our trade.
That is why you can now see my Direct Deal window, in preparation to close.
[B][U]CHART 23[/U][/B]
>>>
By tymen1 at 2009-07-30
We now observe the mid BB going from down to level.
The rest of the bands will follow quickly.
It is the end of the trade and we will take the best of what we can get.
[B]EXIT.[/B]
The red dashed entry line is now gone because I made an exit.
The profit can be seen in the [U]unrealized p/l section[/U] at the top of the chart.
[U]The last thing to do…[/U]
[U]Very important!! …[/U]
[B]Clear your PCI stop loss line!![/B]
[B]
If you do not do this, you will end up entering a trade you do not want!![/B]
awesome explanation…thanks tymen.
[B]Lets now look at the final result sometime later [/B] >>>
By tymen1 at 2009-07-30
[B]Here we draw some conclusions.[/B]
The black line is our entry.
The pink line is our exit.
Our exit was correct since all the bands started going up straight after the pink line.
You may say…“if we had stayed in then we could have got a much greater profit at the [U]blue line[/U]. This is only 5 candles away from the dark cloud pattern on the main chart.”
NO!!
Our method is correct.
Many times the starc band crossing with the bands going up results in a permanent price rise.
The rise is usually very great.
The correct tactic here…is to exit as I have done, then wait until the price action has risen to the upper 0.7 line, (the starc bands are [U]basically[/U] level) then re-enter.
You can then exit again [U]at the blue line.[/U]
So this is a 2nd trade.
If you look carefully, you will see that the price action hit the upper 0.7 starc band 3 candles after the exit at the pink line.
You would re-enter at that long red candle after the doji.
At this point, the mid BB is going down again, as are the starc bands.
[B]An exit anywhere before the blue line in fine too, because you would be taking precautions.[/B]
[B][U]FINAL CONCLUSIONS[/U][/B]
This trade as I said at the outset, was very risky.
I would never do this trade myself.
It is for teaching purposes that I did this trade, to show all the different things that can happen.
Recovery technique is important if a trade goes wrong.
The drawdown in this trade was huge, in fact the risk far exceeds the reward (unless you took the 2nd trade).
In my sample, we had a drawdown of $225 and a win of $61.
The PCI stop loss was even further away but never really under any threat.
[B]So make sure that all the Bollinger and starc bands are in your favour before you enter.
This will save you a lot of heartaches.[/B]
Looks like I have saturated the learning curve with this last trade!!
Nobody is posting anymore.
Tymen
Sometimes a new trader, in search of the holy grail will flee from one system to another… and forget where they were…
and then return…
Tymen:
Please dont stop posting…The class is not empty until the last student is gone…
Thanks.
Muthu.
Thanks there, [B]muthusai2000[/B].
I will continue to post a few more live trades.
But I think the time is fast coming where I post the final PDF.
Tymen,
Long time reader, first time poster, your ongoing lessons have been second to none and after using your method for a number of months I win many more than I lose. Often on the ones that are losers I can look back at them and find something that may have made it a ‘no trade’.
I wanted to say a sincere THANKS to you for the huge amount of time you have put into this and anxiously await your final PDF.