ES Journal Archive (2006 - 2008)

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An example of a class C BRD would be the 240 chart that just ended. The class C is with RSI--there is no BRD with
histogram. ---Price has made a double top--RSI has made a double top. Class C is the weakest.
 
Quote from romik:

Could you possibly post a screenshot, because I was under the impression that you consider B class to have 2 troughs at same level, did I misunderstand you?
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This would be a class B as well if price makes new high.
 
Quote from romik:

Could you possibly post a screenshot, because I was under the impression that you consider B class to have 2 troughs at same level, did I misunderstand you?
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Please - 1,2 or 3 charts tell more than words:p
 
Quote from hpeganz:

:p :cool: :D

Edit: learning by doing -seeing - recognizing :)
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But one thing is important and I don´t know --> how do I see or recognize when the formation is over ???:eek:
 
Quote from hpeganz:

But one thing is important and I don´t know --> how do I see or recognize when the formation is over ???:eek:
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1. Try to trade only A class divergences;

2. Try to monitor 1, 2, 3 min TFs and if you see the divergence developing on these TFs and you see a formation on 5 min TF - trade it before it completes formation - second peak on HIST is heading towards 0 mark, though has not quite reached it;

3. Seek confirmation in at least 2 indicators, I found best to trade HIST divergences and confirmation in either RSI or CCI;

4. When you are about to trade a 5 min TF divergence, look at what's happening on 1 min TF RSI, as you do not want to take the trade at the time RSI is above 70/30 and either shows a divergence there or starts breaking 70/30 reverse movement; same for CCI if it's breaking +/-200 and sliding;

5. Have Bollinger Band switched on to see the channel easier, obviously taking the trade when price is hitting either higher and going short is safer than price hitting high level and going long, same for lower BB level;

6. Allow at least 2.5-3 points range at the time of divergence;
7. Don't be greedy and I normally aim for average price range at the time of the first low/high trough in HIST;

8. Divergences that work out on 5 min TF normally is a pretty rapid movement that would happen when HIST hits and goes past 0 mark, if that has happened and price is still going in the different direction, be ready to bail out;

9. Have hard stops based on 2-3% max loss to trading capital, though I would not allocate more than 3 points for a stop;

10. Get a Ninja Trader demo account and trade these signals on a simulator until the time you feel that you do not hesitate when seeing the signal;

11. When you realise how involving this is on short time frames, you might consider going for longer TFs, but you would require healthy capitalisation to trade longer TFs as you will most likely have to average your position.

This is about all I can mention, of course there are many other nuances that will increase the odds, like if hit a uptrend day, I would only take BLDs and forget about BRD (5 min TFs) and vice versa, etc.

All the best.
 
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