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I'm assuming this is the Investor/RT charting tool? That's a pretty nifty indicator... I like it. I'm landlocked on Ninjatrader at the moment since I'm also exploring the Bloodhound product as well. Investor/RT looks to be an interesting piece of software however.
Has anyone seen a similar tool that's NT compatable?
Best
Broman
Can you help answer these questions from other members on NexusFi?
First of all, this study has to be built using the time frame in which you trade. So I'm going to go on the assumption that you will be tracking rotations using 1 min bars.
2 tick minimum pullback is pretty tight. What is the market you are study? You will likely see tons of rotations that give you little to work with once you give up a tick to get in.
Assuming what you have done is correct, my opinion is as follows:
My 1st scale would be inside of 5 ticks
My stop would be outside of 8 ticks
Your target then has to compensate for the 5-tick scale out versus 8 tick stop which leaves you with -3 ticks of exposure. So your target on a 2nd contract would be around 11-12 ticks
What is more important here, in my opinion, is that you need to watch for any rotations that are 10 ticks or bigger (greater than 2 sigma event). If you have an alert for a rotation set to 10 ticks or better, then this might be your 1st indication that the rotations are expanding well beyond what is "normal" and you need to pay attention especially if this happens near an area or level where you intend to do business. It can signal exhaustion OR the beginning of an impulsive move.
I know that is very technical and it is easier to just talk about it, but I hope you get my point.
Good luck and be militant about your risk control.
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Hey FT, thanks for that. Great minds must think alike as post me posting my original findings I thought to myself that the 1min chart was a bit too tight in terms of timeframe and the 2 tick pullback was also a little punchy.
Results using a 2 tick Renko (which I feel comfortable with) and a 3 tick pullback are:
Sample Size = 984
Max =42
Min =3
Ave =9 VPOC for the rotation study is 6 ticks
So based on your previous reply plus the amended stats from above a viable trade management scheme to start off as a launching point for further testing would look something like the following - Stop = 15 ticks , first scale = 6-9 ticks. if the first scale is achieved I am left with 6-9 ticks of risk on the table so second target needs to be around 15 ticks.
I hope I am making sense. I am a complete novice with Excel but basically took all your AMA's and Webinars and when you were walking through it I paused, zoomed in, copied the formulas from the screen, made mistakes, tried again, made more mistakes, rewatched the videos etc etc. Now I can pretty much do a rotation study in my sleep! Thanks again.