Exit position using Price Action
- Thread starter Rorschach_test
- Start date
thx
quick follow up.why the yellow most important?
I use the Chandilier trailing stop described by Chuck LeBeau. The period for the ATR and multiplication factor should be based on the instrument you are trading. See this link for more information: http://stockcharts.com/help/doku.php?id=chart_school:technical_indicators:chandelier_exit
Sorry for butting in, but the Price Action part of the title caught my interest, and there appears to be some confusion over these channels.
Price moves up and down. Sometimes these movements become trends. These trends can be tracked by trendlines. However, trendlines do not necessarily form channels. Channels have a specific function, but if the instrument is not mean-reverting, whatever channels appear to be there may exist only in the imagination.
This does not mean that trendlines cannot be used to trigger an exit. To the contrary, they are among the best -- if not the best -- triggers. If nothing else, they don't require any calculation. Channels, however, particularly if the trader is torturing price into fitting into one, can quickly become useless, especially if one is getting into channels within channels within channels within . . .
As you were.
Price moves up and down. Sometimes these movements become trends. These trends can be tracked by trendlines. However, trendlines do not necessarily form channels. Channels have a specific function, but if the instrument is not mean-reverting, whatever channels appear to be there may exist only in the imagination.
This does not mean that trendlines cannot be used to trigger an exit. To the contrary, they are among the best -- if not the best -- triggers. If nothing else, they don't require any calculation. Channels, however, particularly if the trader is torturing price into fitting into one, can quickly become useless, especially if one is getting into channels within channels within channels within . . .
As you were.
also,what constitutes the BLUE line?How do you define it?
thank you.there`s an indicator flowing elsewhere,but it`s not degapped,therefor incorrect.i use completely degapped template.
It seems I am creating over-complication in an attempt to clarify the information I had in my head when looking at the chart. I call these 'channels' for lack of a better vocabulary word to use for them.
The yellow supply line tracks the current movement of price. The "LTL" on the other side of the yellow supply line I use to measure pace.
I drew the blue line in order to measure the distance from the first swing high which begins the yellow line to the following swing low. Both occur within one bar. The second swing high on the yellow line and the subsequent low is only able to cover about half the distance of the first thrust downwards.
A slowing of pace, nothing more, but one which I have found quite accurate in giving an indication of an impending change in sentiment before any of the "containers" we make for price is actually broken.
The yellow supply line tracks the current movement of price. The "LTL" on the other side of the yellow supply line I use to measure pace.
I drew the blue line in order to measure the distance from the first swing high which begins the yellow line to the following swing low. Both occur within one bar. The second swing high on the yellow line and the subsequent low is only able to cover about half the distance of the first thrust downwards.
A slowing of pace, nothing more, but one which I have found quite accurate in giving an indication of an impending change in sentiment before any of the "containers" we make for price is actually broken.
and yet,what gives you a confidence that the pace is slowing down,prior to the channel BO?you`ll never know if the price continues or rverses until it`s within the channel.
ok,then what did you mean by ''it would need to hit blue line to maintain the pace"?i don`t quite understand.what should hit the blue line if it wass just the measurment of the 2 points in a channel?