13 Aug 2010
Pair: GBPUSD
Timeframe: 1H
Similar trade to the above. I set my pending orders for a short trade with 2 contracts with entry price at 1.5608. SL was set at 1 extreme candle length from the high of the extreme candle, at 1.5668.
After orders were triggered, PA moved upwards and closed above the high of the extreme candle. Trade was exited at market price of 1.5645 for a total loss of 74 pips vs a loss of 120 pips if SL had been hit.
Total P&L = -74pips
I think I need to take you in hand here for a moment, [B]TimberWolfMk2[/B], before you lose too many pips. :eek:
[B]
This is what you are doing wrong…[/B]
You are correctly picking the extreme candles
You are correctly picking the squeeze areas.
You are correctly picking the CBL.
But you are not entering correctly. :eek:
On your chart, note the entry candle.
Now note the state of the BB on this candle.
Look especially at the opposite BB.
Was it contracting or expanding?
It should have been contracting or at least, level.
This is where your mistake is - just because you correctly set a CBL does NOT mean that you must enter on the next candle.
[B]The entry candle is the one where the opposite BB is either contracting or level.[/B]
Had you observed that rule, you would never have entered and therefore not made a loss!! 
Hi tymen, nice of you to drop by with your advice! Hope your health’s doing ok
Thanks for pointing out the state of the opposite BB during entry, I’ve went tthrough my previous trades and noticed that quite a number of my losses did occur when entry was taken when opp BB was expanding. Just wanted to point out that my entries are not all made the next candle after the extreme candle, but rather as and when the pending orders are triggered by the PA reaching the entry price.
Nonetheless I seem to see some problems trying to time my entries with a level/contracting BB:
Since my orders are set after the formation of an extreme candle, I can’t really control when they will be triggered (opp BB could be in any state). It appears that the only way for me to enter with the correct state of the BB is to do a manual entry, but doing so would most likely result in a difference of entry prices (as well as different and possibly reduced P&L). [B]Is there any way that I can set my pending orders and yet still enter when the opp BB is in the right state?[/B]
Given that BBs are dynamic and repaint, I foresee situations where my entry may have been made when the BB was in the right state, but subsequently it repaints such that it is now expanding. [B]Is it possible to avoid this at all or is it futile?[/B]
No ways to avoid those situations you mentioned for me. But what I do is, since im using gft’s dealbook, I set an alarm at the where my CBL would be, I would then receive a SMS or email when the alarm was triggered. I then proceed to examine the trade to see if it meets the criteria to enter. (eg. BB still in squeeze)
Hey ada_ighy, thanks for the tip! Just to clarify, does that mean all your entries are manually entered (after you received the alert and checked your trade)? I’m not using Dealbook, so I have to figure out how to do this in MT4.
While I’m still figuring out the questions in my previous post, here’s my first trade on a new timeframe.
18 Aug 2010
Pair: EURUSD
Timeframe: 4H
As promised, I’ve included the charts of roughly the time when the trade was triggered and when it was completed.
In conjunction with Tymen’s advice earlier regarding the opp BB’s state, I’m trying to be more disciplined in taking trades in the same direction as the prevailing trend in the chart. As seen from the charts above, there seems to be a downtrend that began on 9 Aug. After area P was hit, my pending orders were set for a short trade. Entry according to CBL (extreme candle cut in half) was 1.2883, SL at 1.2979. After the orders were triggered, TP1 was hit and SL was readjusted to B/E. The PA then retraced and hit the new SL.
PS: With the new timeframe, I did not have to sit in front of the computer staring at the charts all day, I only take a quick glance once in awhile. My eyes thank my decision 
Total P&L = +57pips
Hi, im quite new and have started reading through this journal. I can decipher most but could you possibly post some abbreviation translations please, as am not sure what they all mean.
Hey woodsy44x, no worries here’s a quick list of the abbreviations I usually spout:
BB - Bollinger bands
PA - price action
CBL - Count back line
TP - Take profit
SL - Stop loss
B/E - Breakeven
That’s about it, let me know if there’s anything else I missed out
19 Aug 2010
Pair: EURUSD
Timeframe: 4H
This was a re-entry for my previous trade on 18 Aug. Orders for a short trade with 2 contracts were set with the entry price at 1.2880. SL was set at 1.3005. When orders were triggered, I noted that the opposite BB was contracting. TP1 was reached without much fuss and TP2 was readjusted since the opp BB repainted. SL for the 2nd contract was also readjusted to TP1 gradually. Trade was then left to run on its own, hitting the new TP2 eventually.
Total P&L = +153pips
19 Aug 2010
Pair: GBPJPY
Timeframe: 4H
Apologies for this one, I forgot to save a picture of the trade when it was triggered. This was a pretty straight forward short trade. Area P has been reached (at the extreme candle). Entry price set at 133.52 and SL at 135.08.
TP1 was reached quite quickly and the SL for 2nd contract was readjusted to B/E, after which TP2 was also reached. Why I did not adjust the 2nd SL to TP1 was because I’d gone to sleep, so I could not monitor the movement.
PS: something I’ve been noticing is with my current SL rules, my R:R ratio tends to be really low, especially when the extreme candle is a big one. May consider using half a candle length for setting SL when the extreme candle is big (then again defining “big” is a problem; for convenience I may just take candles whose range span the outer BB and the middle BB to be “big”).
Total P&L = +102pips
You’re doing well, Timberwolf. Keep up the good work!
