If you remember, the reason I started to trade the first bar setup was to get out of a slump, a period of time where you can't get anything right and end up spending the day talking in chat rooms and drawing lines on your charts. But as I found out there is also a good second reason to trade the first bar setup. Today was a slam dunk....because there ain't no reason to just go short on the open, no pullback, no CCI(none of the 57 different setups)reason, no bollinger bands, no Maria B...nothing. Oh yea somewhere around the 785 area if you are a student of LBR there was a nice flag formation to work with but that was it baby. In fact, the boys using the 3m CCI would be looking to go long on a Vegas trade.....nice one and THANKS
Even after you entry the first bar breakout, meaning that the low was taken out without taking out the high....there wasn't even any heat in the trade....well except for about a minute and then someone pulled the rug out from under the market....
So let's talk for a moment about that bear flag formation and the idea behind it. The market is selling off and starts to move sideways just after the open for about 20 minutes. This is where the buyers were drawing a line in the sand, if you like.
The only question is....who will run out of funds first....can the seller over power the buyers or will the buyer give it their best shot and we rally from this low. Today, the buyer gave up and when they did you can see just how wide those bar are for the next 9 minutes as once the lows were taken out, they not only covered their trades for a loss, but they reversed all engines and started shorting....which only added fuel to the selloff. Another flag, another selloff......just a simple function of the market and people getting trapped on the wrong side.
Which brings us back to using indicators, I know, I know, you bought this indicator package from Bob, the Market Guru....and for some reason believe it's the holy grail...you haven't made any real money with it YET....but man are you so close you can feel it...RIGHT.
More on this later in another blog.
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8 comments:
i love enjoying your market insights and little pieces of wisdom, keep them coming, they are helping me think differently.
-jason
loogs good AGAIN!! :)
what is your exit strategy for the other half?
Thank you for all of the work that you are doing here. It is greatly appreciated
Your right - those woodie CCI trade setups can be murder - thank god I don't use them!!!
I was wondering if you wait for the second bar to close or not before entering. I assume you would have to wait or else you would not know if it would eventually take out the other side of the first bar.
Welcome back and thanks for the updates, they're great! I'm also curious about your exit strategy for the rest of the contracts.
Also, you mentioned taking out the low without taking out the high. If the low is taken out, do you wait to later in the bar (or the next bar) to confirm the high isn't (or won't) be taken out?
Thanks again - th examples are great.
Dennis,
What settings are you using on that Stochastic 70T chart?
MarioM
Thanks for your efforts to teach a little trading. I've been frustrated trying to figure out how I can make your idea about the opeing bar trade work for me.
Then I had a brainstorm and worked out something that I can use. Your idea served to motivate me to come up with my idea.
I take the mid-day trading range and buy or sell the breakout. Then I manage the trade with profit targets and stops.
NO INDICATORS!!
If Woodie can trade without price bars then I can trade without indicators.
I'm doing a thorough back testing of it now before beginning to trade. It looks good so far.
Thanks again.
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