Wide Range Bodies or 'big' candles

[Anonymous 11]

PP - ... As you said, some days WRBs work well, other days staying the trade longer is better, etc. etc. And especially after a day like yesterday where my initial long entry was nice and to extract a small portion of the move, that can bit you in the butt to say the least.

 

Not quite what I said. What I was trying to convey is that if you choose A, there will most assuredly be times when B will seem like the better choice and vise versa.

 

successful traders accept this and move on.

 

Simply, you can not keep chasing exit methods based on the last trade.

 

Your first posts in this thread were raves about WRBs. What has changed? More over, do you believe the market has changed since then?

 

 

1) WRB does not appear when trade moves in your favor. You can patiently wait, but if nothing shows, nothing shows. There needs to be a plan B in place. And what that plan B is, I'm not sure.

 

Again I have problems with this statement. There is always a WRB. It is the candle with the body (open to close) greater than the three (3) prior bodies.

 

If the three prior candles were dojis, then the next candle does not have to have much of a body, but it is a WRB nonetheless.

 

2) WRB takes you out prematurely. There are a variety of ways to work around this as well, but as you said PP, some days taking 3 WRB's will work, some days 2 and some days the first WRB is all that you can get... I've yet to find a good screener for when to take the first WRB and when to take more than one.

 

Again, not what I said.

 

I keep saying that I like to trail. It takes all this doubt and consternation out of the equation.

 

If you want to choose based on the formation or location of the WRB whether to exit or trail, more work is involved. Just look at the above post.

 

As I believe in VSA, I would say you can look at the background but confine that background to what can be seen on the chart at that time. In other words, without regards to the WRBs two days ago. Assuming of course, you are trading a short time frame for day trading.

 

Where Mark and I agree :

 

1. What created the WRB-news event

2. Price action leading up the formation of the WRB.

3. Location of the WRB. Is it within the Support/Resistance zone of another Significant WRB. Here again, I would not be looking back as far as Mark might look.

4. Use of a higher timeframe. More of a move can be captured by increasing the timeframe and exiting based on the WRBs on this higher level.

 

Where we part:

 

1. Volume. Is there high volume but not Ultra high volume. You judge WRBs visually, certainly you can do the same with volume bars.

2. Tops to the left. If there are tops to the left, then a WRB thru this area may in fact be PUSHING THRU SUPPLY. If the pros are willing to absorb the supply at this level, then higher prices can be expected.

3. Effort candles show that the market wants to go one way or the other. The appearance of an effort candle which is also a WRB may signal continuation of the move and trend strength. So why exit?

 

Now look back at the 5 min chart you posted. Just seeing the action (Tops) to the left and knowing the volume would have been enough to know to stay in.

[brownsfan019 17]

Hey guys,

 

Lots been going on here tonight I see.

 

I'll delve into this more tomorrow sometime, but I think after reading Mark's post (the WRB guru) it's clear that to fully utilize the WRB's in the context as Mark and/or PP do, more work and analysis is involved.

 

Now, let me explain a few things before any chastising commences - I've been trading for years now. Exits have always been my crutch. As PP said, one day method A looks great and the next day it looks like junk. I get that. I stumbled across WRB's through this forum and elitetrader. It peaked my interest. Since I am a simple guy when it comes to trading (or at least try to), I thought I would take a look at these WRB's and see if I could use them in a way that I could utilize them. Spending another year of my life studying WRB's and/or VSA is not an option. In the end, I was simply looking to supplement or replace my existing exit strategy. And as mentioned, some days the visual WRB's worked like a charm and other days like Wed left me very frustrated.

 

Call it a learning process in motion if you will. I'm not normally one to take something I read on a forum to heart and put it in motion, but I did here with my own little version of WRB's. And it's now apparent to me that unless I am willing to put forth the time and effort as Mark has to study these, it's going to be a mental battle. A battle on days like Wed where I was long at 1518 and closed around 1535.... That's a difficult mental battle to hae when your entry was in hindsight incredible, yet your P&L did not reflect that. I understand that some days there won't be much to take when you want bigger moves.

 

As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

 

OK, this post has gotten longer than I thought. Off to watch the Cavs hopefully beat the Pistons and then to bed.

[BlowFish 10]

Hey guys,

 

---snip--

 

As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

 

 

Just a couple of things.

 

Firstly If you want to catch those 20 point moves you'll probably end up being stopped out of a lot more on those 2 pointers. It will require different approaches and more importantly knowledge when to apply each. Sometimes you will apply one where the other would work and vice versa. I guess this is one of the reasons people take half off and ride half.

 

Secondly (and this is something I really empathise with as I am prone to it too) don't over intellectualise. Sure view it as a game but like any game you can not win every hand/round/match. As I say, I speak from bitter experience but trading can actually be very simple once you get an idea of market 'strcture' and mechanics. I think we are all prone to overcomplicate things.

 

I'm not sure if I ever mentioned Eddie Toppels book "Zen in the Markets". You can easily read it in a couple of hours (which I do now and then if I feel I am over intellectualising or looking for 'perfection'). Its his contention that it is the ego at the back of all this.

 

Sure push yourself but there comes a time where a better read of the charts provides diminishing returns compared to looking inwards and improving things there. Well thats my case anyway.

 

Cheers,

 

btw there are some real pearls of wisdom in the last dozen or so posts. This really is a quality venue.

[brownsfan019 17]

I think we are all prone to overcomplicate things.

 

 

You said it Fish! In my pursuit of the perfect exit strategy, I opened a can of worms.

 

As I mentioned above, WRB's should merit your attention if you are willing to dissect them as Mark has. I was taking page 1 of the book and applying it. That didn't quite work.

 

Perhaps when I am having one of those moments you talk about Fish, I will revisit WRB's but this thread will serve as a quick reminder to me that based on me and my trading, using the 'visual' WRB as I have tried to here, didn't always go as planned. That's not necessarily a bad thing, it was just a bit of a mental issue for me. Others may find it works just fine for them.

[brownsfan019 17]

I wanted to respond to some of the great posts here recently since a few have made a very conscious effort to contribute...

 

From walterw:

Hi Brown , I see how clearly you manage your exits with WRB`s, my question and intrigue is what entry criteria do you have to Open a position... would like to learn if its not compromising (no obligation to share)... cheers Walter.

Walter - while I have never given the exact entry method I use, I have shared more on this forum than anywhere else. There's a couple charts of mine with actual screenshots floating around here somewhere.

 

I know some might say just share everything, but to be perfectly honest, I guess that's the business side of me - not wanting to divulge the exact recipe that's taken me years and thousands of dollars to construct.

 

From pivotprofiler:

Then again, I know you are looking to keep it simple. But what could be more simple than letting the market tell you when to get in and when to get out?

I agree... Simple is good. And since I am terrible at trailing stops, a set profit target once again is at the forefront.

 

 

From pivotprofiler:

BrownsFan;

I think you are making a big mistake.

Forgive me, but I think you were on to something an now you are straying.

You should back up and ask yourself this:

"AM I A TRADER WHO WANTS TO EXIT AT AN OBJECTIVE OR BE STOPPED OUT?"

If you are going to exit at a target, then you must not say "look how much MORE the market moved in my direction if............"

You got out. Your trade is done. No time for regrets or coulda', woulda' or shoulda's.

 

Pivot, you may be right, only time will tell.

I think after looking at this more this week, I am definitely not a trailing stop trader. That's for sure. A set profit target is the next logical strategy then.

 

From pivotprofiler:

Choose one, stick with it and no regrets. And the most sure thing I can say; if you choose to trail you will find many examples where exiting at the WRB will make better sense, and if you choose to take profits, you will see many examples of the market continuing on way past your exit.

 

That advice seems awfully familiar. Oh yeah, I think I was trying to myself the same thing in the Blackjack strategy thread! :rolleyes: You are right PP, I can't jump back and forth on these exits and at this point, it's time to move past WRB's for me.

 

From NihabaAshi:

<edited> so much useful info here, I can't begin to do it justice by commenting on all of it <end edit>

 

Mark - once again you show us the light. You've shown me here that there's more to WRB's than I was hoping for and while that is good to know, it's not for me at least not now.

 

From pivotprofiler:

Simply, you can not keep chasing exit methods based on the last trade.

Your first posts in this thread were raves about WRBs. What has changed? More over, do you believe the market has changed since then?

 

You are right PP, can't keep changing.

What has changed? Good question... I think that we've had some great volatility and moves in recent memory and I am not taking advantage of those as much as I should be. On smaller range days or tight volatility, the WRB's the way I was using them work pretty good. Maybe there's something there.... If able to distinguish when we have strong volatility and when we don't, I could have 2 different exit strategies.

 

From pivotprofiler:

There is always a WRB. It is the candle with the body (open to close) greater than the three (3) prior bodies.

 

By the definition you are using, this is correct. The problem I had with that type of calculation is that I was easily taken out of trades WAY early than I already was. I personally did not like this hard calculation in terms of WRB's.

 

====================

 

Sorry I didn't respond to every comment, but you guys get the idea.

 

In summary, I believe that with the proper research and education, WRB's could easily be implemented in a trading plan. I personally was in search of a better exit method and that's it. I have no intention or desire to change my entry methods at all. I find my entries to be my strongest part of my trading currently in terms of solid entries and protective stops that are respected.

 

Maybe I'll start a new thread on the exit strategy being used. My only reservation is that the topic has been hashed over here before and I'm not looking to reopen the can of worms of set profit targets vs. trailing stops for exits.

 

I feel like a relationship is ending here... But, it's just the end of the WRB pursuit of happiness for myself. Maybe this thread will die, maybe PP and Mark will keep it going. Hopefully my contributions to this thread has been a worthwhile read for those following. As much as I may want to check the WRB's out on my charts or see the screenshots here, I have to back away from the WRB's and take a break. I need to enter a WRB detox program.

 

Once again, thanks to those that have helped and contributed to the thread, esp Pivot and Mark. This thread would have died a long time ago w/o you guys sharing information.

[Guest cooter]

As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

 

Perhaps the new therapist in town, Dr. Janice, could help you resolve your longstanding issues.

 

http://www.traderslaboratory.com/forums/f96/daily-p-l-targets-1841.html#post11686

[wrbtrader 10]

In the end, I was simply looking to supplement or replace my existing exit strategy. And as mentioned, some days the visual WRB's worked like a charm and other days like Wed left me very frustrated...

 

That's a difficult mental battle to hae when your entry was in hindsight incredible, yet your P&L did not reflect that. I understand that some days there won't be much to take when you want bigger moves.

 

As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

 

OK, this post has gotten longer than I thought. Off to watch the Cavs hopefully beat the Pistons and then to bed.

 

Hi brownsfan019,

 

This post isn't only directed to you but to those that plan on participating or reading this thread in the future.

 

I'm a strong believer that prior to any trade we need to map out the possible scenario from entry to exit.

 

Thus, some trades I enter I do not have a goal of trying to catch a big move and that decision is made prior to entry.

 

Also, there are trades I'm just trying to catch a few points (not a big move) or a few ticks.

 

Once again, the decision is made prior to entry.

 

However, I do understand enough about the market dynamics that sometimes things unexpectantly change in the supply/demand.

 

It's during these times when we need to have the ability to adapt our trading plan to stay in trades that have a big chance to develop into a trend day.

 

My point, May 30th Wednesday should only leave you frustrated if you mapped out that trade prior to entry to be a big winner via your prior analysis revealing that May 30th Wednesday has a good chance to be a trend day.

 

Simply, if your goal was to exit at the first WRB appearance and if you did just that...

 

You had a very successful trade regardless to how far it moved upwards and you shouldn't be thinking about what you could have gotten.

 

To take this a little further, you should design a contingency plan re-entry method just in case it does develop into a trend after you have exited the trade.

 

In that case, this really has nothing to do with WRB's and has every thing to do with not having a re-entry method on trend days.

 

Once again, your goal for the trade should be determine prior to the entry because if you don't your going to be beating yourself (getting frustrated) with any type of exit strategy.

 

The real question or another question is how does one determine if a trading day is more likely to be a trend day in comparison to range or choppy trading days.

 

I already answered that here at Traderslaboratory.com in another thread and partially in this thread.

 

* Market Seasonal Tendencies

 

* Contracting volatility trading days usually are followed by a trend day or a trading day with at least one strong (parabolic) intraday price movement.

 

* Key Economic Report or Regular Schedule Market Event related to the FED

 

I've already discussed the contracting volatility prior to May 30th Wednesday and the key market event that setup the WRB S/R zone to give us a point in the sky to shoot at.

 

However, I did not mention (intentionally) the other regular schedule market event on May 30th Wednesday.

 

That's the 2pm est FOMC minutes.

 

All I'm saying is this, traders missing trend days is one of those discussions that will always uncover frustrations regardless to the exit strategy being used (it has absolutely nothing to do with WRBs)...

 

Trend Days is a very popular discussion, always will be and should be because they involve what really moves the market.

 

Big Hint: My personal experience (+15 years) and via talking to many other successful traders...

 

If you want to ride those big price moves on trend days or be at the plate when a trend day occurs, you must keep track of anything related to the FED and its former chairman.

 

Thus, the best trend days are associated with the FED and when the FED is not walking nearby...the ES, ER2, NQ and YM will try to find direction from other key markets (Hint: Oil and Gold).

 

http://fidweek.econoday.com

 

Federal Reserve Board: What's Next

 

Forex Forum, Forex Calendar, Forex News @ Forex Factory

 

Note: Any decent realtime news alert source about the markets will catch stuff like when the former FED chairman Greenspan is giving a speech et cetera.

 

"Knowing what really moves the markets (the real indicators) will put us ahead of most."

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

[Anonymous 11]

........As I've mentioned a number of times here, in the end, it's all a giant mental game. And for me personally, not taking more out of a move that goes almost TWENTY ES pts in your favor is a battle that I cannot win. That's just me. Some guys won't bat an eye as long as they turned a profit, but I always push myself, esp in my trading business. I won't settle for 2-3 pts on a 20 pt move and be content. Again, it's not me.

 

Just a few things:

 

* I believe in surrendering to the market, in following it. I believe in wanting what the market wants. A trailing stop therefore works for me.

 

* I believe one should never exit a trade with a profit. Let the market take you out. At some point it will move against you and take you out.

 

* Entries are therefore stressed more than exits. Exits are easy: move the stop until it gets hit. Never move the stop in the opposite direction of the trade. Use WRBs and VSA signs to move the stop in the direction of the trade.

 

* Under trade in both size and frequency. Here trailing a stop helps. You can stay in a trade longer and thus be forced to make fewer trades.

 

Now, let's talk about the real issue as I see it. If you are unwilling to trail your stop......

 

THE REAL QUESTION THUS BECOMES, WHY ARE YOU UNABLE TO GET BACK INTO THE MARKET AS IT CONTINUES TO TREND?

 

The failing is not in the fact that the WRB takes you out before the bulk of the move, the failing is that you have no way to re-enter the market. (note: this does lead to over-trading, but if we must exit, then we take this risk)

 

Don't throw out the baby with the bath water. Either except that some profit will be "left on the table", or be flexible enough to get back on a moving train.......

 

Your issues are not with WRBs they are with YOU. And in that you are NOT alone. The "should of', could of', would of' " game gets us all.

 

While your focus has been on exits, WRBs offers a wealth of information on trend, support/resistance/, volatility and supply and demand. This is of course, WHY they can be used as profit targets. They can work for you.

[brownsfan019 17]

Perhaps the new therapist in town, Dr. Janice, could help you resolve your longstanding issues.

 

http://www.traderslaboratory.com/forums/f96/daily-p-l-targets-1841.html#post11686

 

Maybe I will pop into to see the good doc!

Thanks Coot!

[brownsfan019 17]

Mark - wow, thanks for sharing, great post.

 

You are correct that any exit method can get frustrating at times. And having a re-entry method or Plan B is just as important.

 

My own limited personal experience using WRB's in the way that I did (visual inspection) led to frustrating days recently. Perhaps I am being too nearsighted and placing blame where it is not due, but in my crazy head, this makes sense. For me, it makes sense simply b/c prior to trying this visual WRB thing out, while exits were not perfect by any means, they were (in hindsight) 'easier' (at least for me mentally). What I mean is, by having a mapped out target as you mentioned, it was easier for me to accept how the trade could go. With a WRB, I am waiting (and hoping) that a WRB appears on my timeframe. As I've said before, if a WRB does not appear while the trade is moving in your favor, there has to be a plan B, even if that plan B is to eventually take a stop out.

 

I really like how Pivot says we need to surrender to the market. That makes so much sense and I get it... however, putting that into motion in real-time when you have very limited time to make a decision is not always easy. Maybe trading on higher timeframes could yield different results, but my entry strategy works best on shorter timeframes or VBCs.

 

I also like Mark the idea of mapping a trade out prior to entering it, but to be honest - that does not work too well for me either. I do that on stock swing trades, but with intraday futures trading, it's a little harder to do on the fly for me. I understand you can look at pivots, previous days stuff, WRBs, etc. etc. but then you end up with a chart cluttered with lines. Of course one of those lines will prove to be the best exit but odds are you will have one hit if there are lines everywhere.

 

In the end, as I've mentioned previously, I like to keep things simple. My charts are simple, my entries while simple are effective and that is exactly how I like it. I was hoping that a visual WRB exit plan may also fit into my simple plan, but I think the additional stress from hoping a WRB appears vs. just taking a set profit and looking to re-enter is just not worth it.

 

But that was the goal this entire discussion - to share my experiences in using WRB's in a very simple way. To see how practical and useful I could make them while merging into an existing trading plan.

[brownsfan019 17]

Pivot - it's not that I cannot get back into a trending trade, it's a matter of the mental game that goes on when you are waiting and hoping that a WRB appears. I understand that if you use WRB's in the way that you and Mark do, a WRB is not far behind. But I was looking for more of a 'pop' by using WRBs.

 

I should stress that trending days are where I can easily make the bulk of my income.

 

Now, before you ask what's the problem then, the problem is really a matter of 'settling' for approx 2 ES pts per trade and re-entering during trend moves or trying to get that 10+ trade. That's more of a mental thing than anything else, but my hope was that visual WRB's might aid in that struggle.

 

So the struggle that took place while allowing the market to take me out was that I wasn't sure that it would. :rolleyes: In other words, if my interpretation of a visual WRB did not appear, I would have to manually make the choice to flatten or let the stop be hit. And of course watching a trade go +4 into -1.5 is a whole other mental game altogether.

[jperl 11]

I understand you can look at pivots, previous days stuff, WRBs, etc. etc. but then you end up with a chart cluttered with lines. Of course one of those lines will prove to be the best exit but odds are you will have one hit if there are lines everywhere.

 

It's interesting brownsfan that you mention this problem about charts cluttered with lines. I use VWAP bands from yesterday, 1 week, 1 month and 1 year as pivot lines on my charts. Sometimes the lines are far apart, sometimes they cluster, sometimes they are all close together. I've discovered that when they are close together, it usually means that the trading day will have a narrow range, and I probably want to stay away. If they are far apart, it means we will have a very active day with high volatility. I particularly like days when they cluster, those are usually good bounce points for reversal trades.

Seems like the pattern of pivots give you a good idea what the day will be like.

JERRY

[brownsfan019 17]

It's interesting brownsfan that you mention this problem about charts cluttered with lines. I use VWAP bands from yesterday, 1 week, 1 month and 1 year as pivot lines on my charts. Sometimes the lines are far apart, sometimes they cluster, sometimes they are all close together. I've discovered that when they are close together, it usually means that the trading day will have a narrow range, and I probably want to stay away. If they are far apart, it means we will have a very active day with high volatility. I particularly like days when they cluster, those are usually good bounce points for reversal trades.

Seems like the pattern of pivots give you a good idea what the day will be like.

JERRY

 

Jerry,

I don't know much about VWAP, so can't speak there. You bring up some interesting points however in connection with range days and I'm sure many would welcome a new thread on this subject for all of us to learn more. I've often thought of knowing when a range day is likely vs. a volatile day as the holy grail to be honest. If you want to share, get a discussion going and we can all benefit!

[walterw 10]

It's interesting brownsfan that you mention this problem about charts cluttered with lines. I use VWAP bands from yesterday, 1 week, 1 month and 1 year as pivot lines on my charts. Sometimes the lines are far apart, sometimes they cluster, sometimes they are all close together. I've discovered that when they are close together, it usually means that the trading day will have a narrow range, and I probably want to stay away. If they are far apart, it means we will have a very active day with high volatility. I particularly like days when they cluster, those are usually good bounce points for reversal trades.

Seems like the pattern of pivots give you a good idea what the day will be like.

JERRY

 

 

Yes Jerry, I encourage you to start a thread on your techniques ¡¡ it will be very usefull for you and for us... cheers Walter.

 

and remind you to use lots of graphic visual aid...

[wrbtrader 10]

...I also like Mark the idea of mapping a trade out prior to entering it, but to be honest - that does not work too well for me either. I do that on stock swing trades, but with intraday futures trading, it's a little harder to do on the fly for me. I understand you can look at pivots, previous days stuff, WRBs, etc. etc. but then you end up with a chart cluttered with lines. Of course one of those lines will prove to be the best exit but odds are you will have one hit if there are lines everywhere...

 

Hi brownsfan019,

 

I think you misunderstood my post or thought I said something.

 

I do not draw lines on my charts...not one single line during trading.

 

However, I do draw one key WRB s/r zone on my chart after the fact when someone ask for a chart example to show the WRB s/r zone I was talking about.

 

Thus, during actual trading, the only thing on my charts are price itself and sometimes I have volume on my chart because I chat in realtime with some traders that heavily do volume analysis.

 

Therefore, I have volume on my charts so that I can see and understand what they are talking about even though volume analysis is not part of my trade decisions.

 

Therefore, there are "no annotations" on my charts during trading.

 

My point, mapping out my trades prior to entry is the reason why things are simple and simple to me is defined by being able to adapt to changing market conditions along with having to view as few info as possible that allows me to trade in a mechanical like reaction.

 

However, I do keep in my head (my thoughts) of one key WRB s/r zone along with the reason why it is the only one I need to know about.

 

Than after the trading day has complete and when I'm updating my trade journal...that's when I annotate my charts due to the fact I want to see what I was thinking about for any particular trading day in the past.

 

Mark

(a.k.a. NihabaAshi) Japanese Candlestick term

[BlowFish 10]

 

I should stress that trending days are where I can easily make the bulk of my income.

 

Now, before you ask what's the problem then, the problem is really a matter of 'settling' for approx 2 ES pts per trade and re-entering during trend moves or trying to get that 10+ trade. That's more of a mental thing than anything else, but my hope was that visual WRB's might aid in that struggle.

 

Can easily or do easily? Its easy to see how you could with hindsight. What does your trading plan say? I suspect from how you have been talking you are winging it (deviating from your plan). Is it a "mental thing" or more of a "change my plan half way through type thing"? You will want a set of rules for each type of trade.

 

And you know for those 10 point trades trailing a 2 point stop isn't going to catch all of them (it may get one once in a while). Quite a few will go +2 3 4 or even more before coming back to close to your initial entry to re-test supply/demand then they'll take off. Others will go half way and then correct before the final 'leg'. Are you going to sit through all those?

 

Most people would be delighted with catching a few 2 or 3 pointers each week most would be delighted catching a 10 pointer each week. With proper use of capital you could pretty much take what you wanted from the markets.

 

Another 'btw' - on days like last Thursday (from memory) going for those 2-3 pointers (if the S&P was anything like the Russel or DAX) generated way way more than 10 points.

 

I can see a lot of your hard work been wasted which would be a shame. Again I speak from bitter experience, I have wasted so so much time and energy only to end up 6 months later right where I started again when plan B turned out not to be the holy grail.

[brownsfan019 17]

Fish - I wouldn't say that the entire plan was changed per say, I was testing a different exit strategy. As mentioned previously, entries and stops have never been adjusted during this trial. In pursuit of a better exit strategy I basically came to the conclusion that taking +2 over and over again throughout the day is much easier for me vs. taking one and hopefully letting it run or being able to do so.

 

With the way that I enter and then taking +2 and looking for a reason to re-enter, you are correct when you get volatile days but not necessarily trending - you can get trades to take over and over and over...

 

I suppose we can debate all day on the best exit strategy(ies), but in the end, I think it comes down to each trader's comfort level. Some guys can take 1 or 2 trades and let them run all day to see what happens. I personally like 5+ trades a day taking smaller chunks. It's easier on me mentally and keeps me active throughout the day.

[BlowFish 10]

I suppose we can debate all day on the best exit strategy(ies), but in the end, I think it comes down to each trader's comfort level. Some guys can take 1 or 2 trades and let them run all day to see what happens. I personally like 5+ trades a day taking smaller chunks. It's easier on me mentally and keeps me active throughout the day.

 

There's your answer. Just forget those 10 pointers. Or at least trade them with a separate version of the plan. i think Ninja allows 2 completely seperate strategies from the same entry.

 

Then I guess those 2-3 day straight up moves will start looking appealing eh?

[brownsfan019 17]

There's your answer. Just forget those 10 pointers. Or at least trade them with a separate version of the plan. i think Ninja allows 2 completely seperate strategies from the same entry.

 

Then I guess those 2-3 day straight up moves will start looking appealing eh?

 

You got it!

 

I figured out that taking +2 and -1.5 on stops, I can have a 40% win rate (approx) and make money. Now, I'm not shooting for a 40% win rate, but it helps to break it down like that. If I can bat 60-75%, should be good in the long run by just simply taking out the position at +2.

 

I know, keep it simple, right? :p

[Anonymous 11]

You got it!

 

I figured out that taking +2 and -1.5 on stops, I can have a 40% win rate (approx) and make money. Now, I'm not shooting for a 40% win rate, but it helps to break it down like that. If I can bat 60-75%, should be good in the long run by just simply taking out the position at +2.

 

I know, keep it simple, right? :p

 

B.F. I got to ask:

 

Why not do things as you were when you starting posting here? - Target 2pt and then, and only then, exit on the close of the first WRB that forms after this point.

[brownsfan019 17]

B.F. I got to ask:

 

Why not do things as you were when you starting posting here? - Target 2pt and then, and only then, exit on the close of the first WRB that forms after this point.

 

Pivot - If I wasn't clear, that's basically what I have been doing. The main issue being that after it moves +2 and no WRB shows, then what? I know your definition of WRB could easily apply, but I was just looking for the visual WRB. And in the end I found that by looking for the WRB after a +2 move ended up resulting in many trades being exited around 1.75-2.5. 1.75 b/c if the candle closed as a WRB, but not at the full 2, I would still exit.

 

I realize there's a few different ways you could construct the exit rules using some version of the above, but it was much more stress on me vs. just taking a fixed level and looking to re-enter.

[brownsfan019 17]

Pivot - I should have explained a little better...

 

Basically by waiting for a WRB to show after a +2 move, a good majority of trades that fulfilled this were closed out at +2, give or take 1-2 ticks. Now, in order for me to possibly get +2.5 on occasion, I had to take much more risk to get those extra 2 ticks. In other words, while waiting for that +2 WRB to appear, price could retrace within the potential WRB candle and then I would be stuck... do I exit even though it's now at +1.25 or wait for another WRB to hopefully appear at +2 or higher? And as you can imagine, that's a losing game.

 

So I just took a step back and thought - is the reward of maybe 1-2 ticks worth the additional risk of 4+ ticks? For me, no.

[BlowFish 10]

This reminds me of a thread I keep meaning to start somewhere about R:R (not sure where yet maybe on Van Tharpes forums). It is very much in the 'concept' stage and may well lead to a dead end.

 

It is my contention that one way of viewing R:R is as changing with every uptick/downtick, as the relative distance to stop and target change. Certainly it seems to me if you enter with a 1 point stop and price moves 1 point in your favour you essentially have more at risk at that point in time. (lets allow open equity to be included) Further more if you have a fixed target of say 3 points when you open the position now this will be 2 points to target from the current price. Essential you start with 1:3 but some way into the trade you are now 1:1.

 

Anyway I don't want to go into much here as it is hardly anything to do with WRB's but i cant help wondering if re-assesing RR through the life of a trade might help improve results?

 

The underlying idea seems intuitively correct but I am not sure how it could be used to improve results. Maybe as the basis of a trailing stop methodology.

[brownsfan019 17]

Fish - funny you would mention that as that's something that's crossed my mind many a times. Start a new thread and see where it goes!

[brownsfan019 17]

Little update here on the WRB front (6/30/07) - in my goal of keeping things simple and after chasing a few different ideas here, I'm back to a very simplified chart setup -- one 5 minute ES candle chart. That's it. :p No moving averages, lines, pivots, fibs, etc. etc. All that stuff can work for the right trader I am sure, but for me, there was too much to think about on a quick decision basis.

 

Back to the WRB thing - my thinking at this point is that on a minute chart format the WRB may be more powerful than on a constant volume chart. Part of the reason is that not many WRB's appear on a constant volume chart, unless there's a substantial push of volume quickly. Of course that says something, but the question I constantly came back to (as mentioned in this thread) is what to do when a WRB does not appear.

 

I would also argue that a WRB is more likely the higher the timeframe you go, although a 5 minute chart works well for me - stops are very reasonable and I can get plenty of setups throughout the day.

 

So my current WRB use is rather simple - on a 5 minute chart (b/c a lot can happen in 5 minutes) and a WRB appears, the position is flattened. I am still just using 'visual' WRB's, but they are clear as day on a 5 minute chart; whereas on the constant volume chart there were times when I would think - is that really a WRB or not? That's a losing game no matter what.

 

Are WRB's giving me perfect exits every time? No.

 

Are my exits a touch better with WRB's in the analysis? Yes.

 

Now, I have a Plan B in place as well for when a WRB does not show. This plan B is simple as well - trail stop when another pattern appears in the same direction of the current trade OR trade stops out.

 

I don't have a way currently to screen WRB's based on whether it is an exit WRB or a continuation WRB as nothing has jumped out at me that works consistently. I have no desire to dive into VSA or any other trading methodology for purposes of WRB exits, so for now, this will have to do - just a visual WRB coupled with a possible trailing stop.

 

It worked well this week.

 

One other note, on a separate topic, by going to a 5 minute chart I am getting less signals, but staying in trades longer. I don't think any way is 'right' but this is a drastic change to my other thread about taking 50+ trades per day. That was on constant volume charts going for small pops. There's no doubt in my mind that it could work well over time, but doing it each day, all day is brutal on your psyche to say the least. And to be perfectly honest, it was not a good match for my personality. I enjoy trading and taking 'enough' trades each day, but 50+ was pushing that edge. Again, I think it could work well for the right person, so I would consider constant volume charts (esp a low setting) for the person that wants to take many trades per day going for smaller moves.