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Maybe we should start a thread for this and share some code. I tried your 1 range bar for my orders but I want to enter the stops at the exchange so in the past what I've done is made a parameter Direction and I put +1 for long and -1 for short and run my strategy twice.
Hi Jeff, don't worry too much on my behalf as I SIM trade the CL as still learning this one.
See attached chart for 8 December.
I should not have taken Trade #1 or #3 as entry price was outside BB and they were both losers. Trade 1 was actually an ORB trade. So when I enter these now I check the BB first before entering ORB.
Also another example (although not shown as a trade) is the BO to the low at about 72.50 between 14.20 and 16.30 - this would also have been a loser unless you followed the BB.
Isn't the 1-2-3 just Dow's theory of 'if a stock confirms a higher peak after forming a higher trough you buy and if it confirms a lower trough after forming a lower peak you sell'?
Why do you say they are a counter trend trade? In the chart attached I have circled four re-entry points in a strong down trend market that conform to 1-2-3 or the Dow theory. I would have thought they were with the trend - not counter trend.
Or are you saying that the 1-2-3 must be consecutive bars?
Note also on that chart that my BB set up would not have kept me out of any of those trades. But it would have kept me out of the losing one @ 70.18 at 13.44.
A good place to learn about the 1,2,3 set up is the "Trading Naked" website. Click on setups and you'll see the Trader Vics 1,2,3. I think that should answer your questions.
At point 3 the reversal is confirmed and everybody's brother is getting short.
A stop run often follows to re-test the penetration at point 3.
Quicker traders may get short at the X, or even closer to the 2 based on other indicators (divergence, Fibonacci retracement, Bollinger band touch, etc.)
I think that looking at a 30 range bar on CL is very useful. I believe that several of the swing high/low trades that you took on the 20 range bar probably would not have been taken if the 30 range bar chart had been consulted.
I have learned not to take breakouts once price is "extended". What's extended? Well after the 2nd pullback the market is more prone to reverse. So I don't take any trade past the 2nd pullback.
I put a bb on my chart and I believe my rule will accomplish the same thing, without an indicator. Give it a try.
Thanks for this, I do believe this will allow me to bracket an entry. I have one more for you, if I can figure this out then I won't need 2 DOMs:
if I'm in a trade I often reverse on my stop point. Is it possible to do this with one DOM? I've been using my second dom for the entry in the opposite direction.