I, along with many great traders highly advocate against stops based on charts/patterns. Stops should be based on a % of your account you are willing to risk, as well as how much the profit target you are shooting for. Thus, the trailing stop that you intend to do should also be defined as a pullback equaling your initial stop loss.
Need some objective rules to stop-gain
- Thread starter WmWaster
- Start date
I, along with many great traders highly advocate against stops based on charts/patterns. Stops should be based on a % of your account you are willing to risk, as well as how much the profit target you are shooting for. Thus, the trailing stop that you intend to do should also be defined as a pullback equaling your initial stop loss.
Yes...there are no threads title or called WRB Analysis.
However those 7 results you found is within a thread called Trading Hammers (revisited) that contains lots and lots of chart examples along with explanations of WRB Analysis.
Just ignore the Hammer info if Japanese Candlesticks isn't your thing and tune in on the WRB Analysis (profit targets) info that's discussed in that thread.
Here's a quick summary:
* WRB stands for Wide Range Body or Wide Range Bar
Current body (difference between Open and Close) is greater than the bodies of a the prior intervals.
I myself prefer to compare the current body to the prior three intervals.
Some use 5, 7 or 10...doesn't matter as long as it is not less than 3.
* WRB's contains a wealth of information about volume, suppy/demand, s/r zones et cetera.
* WRB's because of the above wealth of info are excellent for exit strategy methods.
Simply, exiting your positions into a WRB will help those with problematic issues with their exits.
No complicated math formulas, no computer codes, no indicators et cetera...just simple profit targets via current price action.
Those that don't have any exit strategy problems...best to keep doing what your doing...exploiting those trends.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
=================
WinWa;
Excellent starting place ,not limited to numbers 50 & 72;
that is 50 day /period moving average, with discretion, work about 72 hours a week. Thanks Investors Business Daily,Jack Schwager .
And while that s an excellent swing /position starting place, still use both numbers 50 ma & 72 hours work week approximately;
would like to short GM again & long AAPL, but wrong side of 5o day moving average for both now.
Your seem to be getting a set of advice based on one kind of consensus.
It ios apparent that you recognise that that this grouping of advise flies in the face of what the markets do.
You naturally, feel that making the full run of profits per cycle is appropriate rather than an artificial limitation that is being suggested.
Stops can be related to the run of the given cycle that is going on. Stops provide protection from screw ups outside of your control.
You can see some set targets others scale out or in and out since they percieve making a level of profits is in the "good enough" range for them.
It appears that you want to make the money that the market is presenting to you You sense that you have good ways to get into the market and, likewise, there must be similar ways to do exits of an equal quality. This is a very logical alternative view to that of the concentrated group of suggestions provided thus far.
Your entries can be a clue for you. You understand the trough of a cycle quite well. You see that before the trough conditions set up to give the bottom values and hen you see that the long part of cycle begins thereafter. The later you enter, the less risk at entry because of the robustness of the beginning of the cycle once it is under way.
Peaks are similar in their ability to be telegraphed to you. It is the same for most cycling instruments, however, the periodicity is different.
Cycles are viewed by various approaches is varous ways. The box is an example. So is the parallelogram of the trend analyist. Those who use periodicity operate off a fundamental frequency of price and it double for volume. They all, in common, use thier particular strategy basis for both entries and exits.
You do not so far.
But there is a giant clue for you. You are very ready to use what you already know to be successful in exiting.
Look at any of these methods and let yourself examine one additional aspect of thm.
Figure out is they are used to make money the same way you do. That is, to make money on the long portion of the cycle.
Consider what it would be like if they were to use their strategies to only trade the short portion of the cycle. What would the entry (as a sell of borrowed stuff) look like and would it be different. If you do three strategies (boxes, parallelograms and periodic) you get to see how, again, the strategies all play out in the manner they did for trading long.
so , I recommend that you work a little on your approach as it would be applied to do short trades to make money. You will find out that the time to exit a long it the same time to enter a short using your successful entry current approach.
It ios apparent that you recognise that that this grouping of advise flies in the face of what the markets do.
You naturally, feel that making the full run of profits per cycle is appropriate rather than an artificial limitation that is being suggested.
Stops can be related to the run of the given cycle that is going on. Stops provide protection from screw ups outside of your control.
You can see some set targets others scale out or in and out since they percieve making a level of profits is in the "good enough" range for them.
It appears that you want to make the money that the market is presenting to you You sense that you have good ways to get into the market and, likewise, there must be similar ways to do exits of an equal quality. This is a very logical alternative view to that of the concentrated group of suggestions provided thus far.
Your entries can be a clue for you. You understand the trough of a cycle quite well. You see that before the trough conditions set up to give the bottom values and hen you see that the long part of cycle begins thereafter. The later you enter, the less risk at entry because of the robustness of the beginning of the cycle once it is under way.
Peaks are similar in their ability to be telegraphed to you. It is the same for most cycling instruments, however, the periodicity is different.
Cycles are viewed by various approaches is varous ways. The box is an example. So is the parallelogram of the trend analyist. Those who use periodicity operate off a fundamental frequency of price and it double for volume. They all, in common, use thier particular strategy basis for both entries and exits.
You do not so far.
But there is a giant clue for you. You are very ready to use what you already know to be successful in exiting.
Look at any of these methods and let yourself examine one additional aspect of thm.
Figure out is they are used to make money the same way you do. That is, to make money on the long portion of the cycle.
Consider what it would be like if they were to use their strategies to only trade the short portion of the cycle. What would the entry (as a sell of borrowed stuff) look like and would it be different. If you do three strategies (boxes, parallelograms and periodic) you get to see how, again, the strategies all play out in the manner they did for trading long.
so , I recommend that you work a little on your approach as it would be applied to do short trades to make money. You will find out that the time to exit a long it the same time to enter a short using your successful entry current approach.
WmWaster,
It's difficult to pin point the highs/lows of a price wave.
Better concentrate on getting a good part of it, then do the same on another wave. It's easier to go only after the wave's slope that is in the same direction as the longer time frame trend. If you're trading only one asset this means that you'll stay longer out of the market, so find and trade a few assets that are loosely correlated.
It's difficult to pin point the highs/lows of a price wave.
Better concentrate on getting a good part of it, then do the same on another wave. It's easier to go only after the wave's slope that is in the same direction as the longer time frame trend. If you're trading only one asset this means that you'll stay longer out of the market, so find and trade a few assets that are loosely correlated.
Compounding formula
initial_amount * (1 + %profit) ** number_of_trades
shows that increasing the number_of_trades has a bigger impact than increasing the %profit per trade.
It's more effective to concentrate more on turning your money faster than on increasing the profit you take from each trade.
initial_amount * (1 + %profit) ** number_of_trades
shows that increasing the number_of_trades has a bigger impact than increasing the %profit per trade.
It's more effective to concentrate more on turning your money faster than on increasing the profit you take from each trade.
Hey, is there any difference between Wide Range Body and Wide Range Bar.
To me, Body seems to mean the difference between open & close; while bar, high and low.
I still don't understand how to use the size of WR Body/Bar to develop exit plan.
Can you explain about that?
You says no indicators/math is involved, so is it to do with recognising the shape/pattern of the trend (something similar to candlestick pattern recognition)?
Finally, where can I learn more about candlestick analysis OR your WRB method (eg e-books, websites)?
First, I've seen traders get confused by the term BAR.
Thus, depending upon the trader it could imply the difference between the High and Low instead of the difference between the Close and Open.
Whereas in comparison to using the term BODY.
It's more of a Japanese Candlestick term that implies the difference between the Close and Open.
Once again...depending upon the trader...there's different definitions out there about a Wide Range BAR.
As for your next question as explained several times in that thread I mentioned along with tons of chart examples (I'll link to one of the charts in this post from that thread)...
Without re-explaining everything that's said in that thread...
I'll keep it brief.
Here's the very first chart in that thread...
http://www.elitetrader.com/vb/attachment.php?s=&postid=800269
Do you see what's annotated as pt1, pt2, pt3, pt4 and pt5...
Those are WRBs.
* They are WRBs via the fact that their bodies is > than the bodies of the prior three intervals.
* Now...each pt level to qualify as a WRB pt level must occur above the prior WRB pt level.
Entry Signal < pt1 < pt2 < pt3 < pt4 and I think you should get my point with that concerning a Long position and vice versa for a Short position.
* Don't wait for the interval to complete itself. As soon as you have a WRB no matter how much time remains in the interval...
It's a profit target that requires banking profits.
Further as explained a few times in that thread...use the same chart interval for your WRB pt levels as your pattern signal or entry signal interval when new to WRB Analysis.
However, as you get more comfortable in understanding the supply/demand information within the WRB...
You can then start using a higher chart interval for pt2, pt3, pt4 and so on to catch more of the trend if you have reasons (whatever those reasons may be) that you've caught a mover (trend).
In addition, as you learn more about WRB Analysis...you'll have develop some intuition or experience to know when to capture more of the WRB prior to the interval completing.
That's it in a nutshell and there's more info in that thread about using WRB's as profit targets along with chart examples.
As for the math...its just simple mathmatics...no computer code nor calculator needed.
For example...lets pretend you just enter a Short position and the prior three intervals has a body average length of 4 ticks.
You know its not a pt1 until 5 ticks.
Also, when you get good at it...you can visually see when one interval has a longer body than the prior three intervals...
Very difficult to miss.
Mark
(a.k.a. NihabaAshi) Japanese Candlestick term
?_?
So which one does your "WRB" refer to, the main body, or the whole bar, or both?
And when you says "body" do you personally means the length between open and close?
And how about "bar"?
Not sure if I get you right. It seems you treat "bar" and "body" the same, but some traders treat them different. That's why you says WRB stands for Wide Range Body/Bar.
So the B in WRB should mean "difference between open and close" for you, right?
What do you mean by 3 intervals?
Last 3 candlesticks?
Eg if the length of the current candlestick's body is larger than those of the last 1, 2 & 3. You will put a "pt" mark on it.
How to identify?
What to determine WRB level? By open/high/low/close price?
[op = open; cl = close]
Provided that pt 1 candlestick is op:15000; cl: 15010, if pt 2 candlestick is -:
a) op:15000; cl: 15011+
b) op:15001+; cl: 15009
Should I classify it as "above the prior WRB level"?
...
{still digusting the rest}
Thank you!