It is possible that the much material herein has confused you.
The first chart, as [B]muthusai2000[/B] stated, is a 30 minute chart and not a 5 minute chart.
When to enter is more complicated.
[B]The entries on this candlestick system are now clearly worked out and posted.[/B]
[B]In the Basic level…[/B]
Retraces - Strategy A which improves the win/loss ratio.
Pips first (or immediate profit) - Strategy B which improves the risk/reward ratio.
[B]In the Advanced level…[/B]
level Starc bands on 5 min chart - check for AGREEMENT with mid BB/Starc bands and if YES then enter at the appropriate 0.7 line and improve with the 2nd amount entry.
non level Starc bands on 5 min chart - check for AGREEMENT with mid BB/Starc bands and if YES then enter immediately and improve with the 2nd amount entry.
I am going to be very lazy tomorrow (Monday) and do no posts!!
I will be catching up on my trading!!
Most of the PDF material is now posted herein.
Some of the material (edited) will be included from the previous PDF.
Only a few extra notes will need to be added here and there to give the PDF a sense of logic and continuity.
So I will be formulating a trial PDF for comment soon.
Guys, looks like from the last Tymen posts there are more charts with successful examples and a couple rules, but still no step-by-step walkthrough is forthcoming. Should one of us take a stab at explaining how this works in such a way? I may just do a step-by-step, even knowing it’s wrong, just to get corrections from you in your replies so I can finally have the steps codified.
Step 1: Is price on/near an outer BB on a 20 minute - 60 minute chart? If yes, continue.
Step 2: Do the last few candlesticks exhibit one of the 3 candlestick formations posted by Tymen1 as a reversal, considering he posted 3 patterns for being on the upper BB and 3 for being on the lower BB. If yes, continue.
Step 3: Look at the 5 minute chart with the Tymen Starc Bands. Are both the mid BB and the Starc Bands going in the direction predicted by the candlestick pattern in step 2? If yes continue. If no, wait until they do.
Step 4: If the Starc Bands are almost level, enter at the 0.7 Starc Band. If the Starc Bands are moving sharply, enter at the mid Starc Band.
Step 5: If Starc Bands are still level, exit at the opposite outter Starc Band. If Starc Bands are moving fast, exit after the big movement when it returns to the mid Starc Band, or exit if it breaks out considerably (See Tymen1’s latest post on this, I won’t repeat it here).
That’s a simplistic view of the strategy. Read Tymen1’s posts for more details.
Ok looks good to me. I think its better we start posting charts even of a failed trade so we learn more out of it. Remember a picture speaks thousand words !
So I waited and waited tonight thinking I was finally going to trade this right. It looked like GU was in an upward trend. I went long when it looked like the price was outside the bottom edge of the Bollinger on all three of my charts and a Bullish Morning Star Doji formed:
When I made the buy the mid Bollinger had evened out (turns out only briefly). Lost quite a big chunk thinking I’d finally done something right. :mad:
If this is a 20 -60 min chart then this clearly was a bad one to trade going long. The mid bollinger band is going down and the upper and lower bands are widening.
The pattern is ok. However, the bb has just started to trumpet !!! So i believe that made this trade a loser. Ideally, i would have waited for a second confirmation pattern to decide.
First i wanted to thank Tymen for his work and all the others who contributed to this thread.
I’ve been following this thread over the last few weeks and i’ve learned alot.
I made couple notes while reading this thread and assembled a little step by step playbook and wanted to share it with you.
Here we go:
[B]1. Finding a trade[/B]
[B]Setup:[/B]
[ul]
[li]Chart: 20m � 1h timeframe (the longer the timeframe, the more reliable the pattern)
[/li][/ul]
[ul]
[li]Bollinger band: mid BB is a 20 period SMA
[/li][/ul]
[B]ToDo:[/B]
[ul]
[li]Find a strong reversal pattern on an outer BB.
[/li]Bearish pattern on upper BB, Bullish on lower BB.
It�s sufficient if one of the wicks touches the BB.
[/ul]
[ul]
[li]Confirm pattern with direction of middle BB.
[/li]Be careful if BB are expanding.
[/ul]
[ul]
[li]Place PCI stop loss 3 pips below (above) the lowest (highest) candle wick of the pattern if going long (short).
[/li]
[li]Switch to 5 min chart.
[/li][/ul]
[B]ToDo:[/B]
[ul]
[li]Check if middle BB is going in the same direction as your trade
[/li]
[li]There are 3 Cases when to enter a trade depending on Starc band direction:
[/li][/ul]
o [B]Starc bands are level[/B] - wait till price hits the relevant 0.7 line.
Enter 1 amount, improve entry with a 2nd amount.
o [B]Starc bands are going against you[/B] - enter at the relevant 0.7 line then improve on that entry with the 2nd amount.
In this case, there will be a lot of room for improvement with the 2nd amount.
o [B]Starc bands are going your way[/B] - In this case price action is going on a roll uphill or downhill.
Enter at the mid Starc band. It is unlikely you will improve on the entry so you can enter both amounts at once.
[B]3. Exiting the trade[/B]
[B]ToDo:[/B]
[ul]
[li]There are 2 cases when to exit the trade:
[/li][/ul]
o [B]If BB is expanding[/B], check if Starc bands are riding the BB following the trend from main chart. If that�s the case, ride along and postpone exit till SB is moving inside away from the outer BB.
[B]Mickeyl177 [/B]and [B]muthusai2000[/B] have both answered this problem trade correctly!!
If I see it correctly, the mid BB on this main chart is in blue.
If that is the case, then it is going down strongly.
A mid BB going down strongly on a main chart when you want to trade up is a big no no!!
Further, the outer BB are[U] expanding rapidly[/U] and the price action is walking the lower BB.
[U]This is then a classic case where a 2nd long pattern is needed to turn the price action upward.[/U]
[B]The 2 pattern rule applies to the lower BB as well as the upper BB!![/B]
I have already explained that the BB on the main chart needs to be heading flat or turning inwards.
If that is the case then we can start to look at the 5 minute chart.
In the 5 minute chart we check that the starc bands and mid BB are in AGREEMENT.
Soldier on [B]Merchantprince[/B]. Your pattern recognition was excellent.
I see that [B]DodgeV83 [/B]has set up a step-by-step walkthrough. I am glad you gave the feedback for the need for this.
I shall now revise some of my PDF posts and amalgamate them into a step by step walkthrough!!
Here is what i noticed.
[ul]
[li]The 15min chart isn’t reliable enough for interpreting candle patterns.
[/li][li]The pattern was on a expanding BB and the middle BB was going against you. You should have waited for a second reversal pattern before entering the trade.
[/li][/ul]
Welcome to the forum and welcome to this thread, [B]Hing[/B].
I made couple notes while reading this thread and assembled a little step by step playbook and wanted to share it with you
Well done!!
The format of this work of yours will become part of the PDF!!
However, they are a couple of errors I must point out.
It is important that they are removed at this stage so as not to confuse anyone and to maintain accuracy.
So I am reposting your post with the errors removed.
[B]1. Finding a trade[/B]
[B]Setup:[/B]
[ul]
[li]Chart: 20m � 1h timeframe (the longer the timeframe, the more reliable the pattern)
[/li]> [/ul]
[ul]
[li]Bollinger band: mid BB is a 20 period SMA
[/li]> [/ul]
[B]ToDo:[/B]
[ul]
[li]Find a strong reversal pattern on an outer BB.
[/li]> Bearish pattern on upper BB, Bullish on lower BB.
[/ul]
[ul]
[li]Confirm pattern with direction of middle BB.
[/li]> Be careful if BB are expanding.
[/ul]
[ul]
[li]Place PCI stop loss 3 pips away from the extreme point of the pattern.
[/li]> [li]Switch to 5 min chart.
[/li]> [/ul]
[B]ToDo:[/B]
[ul]
[li]Check if middle BB is going in the same direction as our trade
[/li]>
[li]There are 3 Cases when to enter a trade depending on Starc band direction:
[/li]> [/ul]
o [B]Starc bands are level[/B] - wait till price hits the relevant 0.7 line.
Enter 1 amount, improve entry with a 2nd amount.
o [B]Starc bands are going your way[/B] - In this case price action is going on a roll uphill or downhill.
Enter at the mid Starc band. It is unlikely you will improve on the entry so you can enter both amounts at once.
o If the Starc bands and/or the mid BB is going against you, then there is no trade.
[B]3. Exiting the trade[/B]
[B]ToDo:[/B]
[ul]
[li]There are 2 cases when to exit the trade:
[/li]> [/ul]
o If the price action goes extremely outside of the BB, then this makes a good exit.
o [B]If BB is expanding[/B], check if Starc bands are riding the BB following the trend from main chart. If that�s the case, ride along and postpone exit till SB is moving inside away from the outer BB.
Could you define “[I]If the price action goes extremely outside of the BB, then this makes a good exit.[/I]”
I actually assembled this step by step walkthrough to automate this strategy when i got some spare time and the “[I]exit at Opposing 1.0 Star Band[/I]” would have been a lot easier to implement.
Thanks Tymen and Hing for your answers. Hing, that outline is great!
I think I am going to make a couple of example diagrams of the Bollingers and post them here, asking you gents for when are the right times to enter.
Can I gather from your assessment that I would be better served eliminating my 15m charts altogether and just monitoring 1h and 30m charts for each pair? If I see something happening, should I place an entry based on patterns appearing on the 30m chart exclusively? I should mention my trading platform (Trading Station II) features charts in the following denominations:
I meant to reply to this over the weekend and say thanks for posting it. I think my main problem at the moment is understanding the various directions the bollingers can be pointing and how they effect whether I should be looking for a pattern.
The other problem I have is that I have a Micro account (although not for much longer if I keep trading like this badly!) with FXCM and use their Trading Station II. I really like the prog, it is smooth and easy to place and manage trades. But they have no way to add custom indicators and the STARC bands are not among the defaults.
No problem. You will not have success using the 15 minute chart. If you remove this chart completely and only with with a 30 minute chart and a 1 hour chart, you will miss MANY MANY opportunities.
FXCM uses MT4, check my previous post here with the youtube video to see how to setup the period converter.
