Price Action Journal V1.5
- Thread starter TraderKaizen
- Start date
I have been lurking around here for a while now, but decided to sign up and join the posting. I appreciate the discussions and input from everyone, it has been a good resource. So here is my question....
On a 3 bar reversal how does everyone deal with a long bar on the second bar? I find it especially difficult to avoid a stop when entering after a really long second bar if the volume isn't spectacular. If the volume is great then it usually keeps running, but if it is just good enough to trade but not spectacular I find a stop is often imminent. I have taken to entering half way up the bar and resigning myself to missing some great moves in an effort to avoid the stop loss. I would be interested in hearing anyone else' strategies.
On a 3 bar reversal how does everyone deal with a long bar on the second bar? I find it especially difficult to avoid a stop when entering after a really long second bar if the volume isn't spectacular. If the volume is great then it usually keeps running, but if it is just good enough to trade but not spectacular I find a stop is often imminent. I have taken to entering half way up the bar and resigning myself to missing some great moves in an effort to avoid the stop loss. I would be interested in hearing anyone else' strategies.
Quote from neekoryan:
I have been lurking around here for a while now, but decided to sign up and join the posting. I appreciate the discussions and input from everyone, it has been a good resource. So here is my question....
On a 3 bar reversal how does everyone deal with a long bar on the second bar? I find it especially difficult to avoid a stop when entering after a really long second bar if the volume isn't spectacular. If the volume is great then it usually keeps running, but if it is just good enough to trade but not spectacular I find a stop is often imminent. I have taken to entering half way up the bar and resigning myself to missing some great moves in an effort to avoid the stop loss. I would be interested in hearing anyone else' strategies.
I'd switch one timeframe deeper/lower and would trade the micro trend reversal. This way you see exactly how the trend reverces, where to enter and where to put the stop.
If the stop is taken - then the trade is invalid.
Epetrov is right, find out what's taking place within your lower chart interval first. This will help to "unmurky" the waters a bit, so to speak.
If you're a Candlestick chartist, one rule of thumb that I use is to wait for pullbacks of the bullish/bearish engulfing candle patterns. If price moves without me without a pullback, not so bad. But never chase price (never). Again, the lower chart intervals tend to show you enough of what's "beneath the hood" to help make more sound decisions.
Regards,
Tex
Quote from neekoryan:
I have been lurking around here for a while now, but decided to sign up and join the posting. I appreciate the discussions and input from everyone, it has been a good resource. So here is my question....
On a 3 bar reversal how does everyone deal with a long bar on the second bar? I find it especially difficult to avoid a stop when entering after a really long second bar if the volume isn't spectacular. If the volume is great then it usually keeps running, but if it is just good enough to trade but not spectacular I find a stop is often imminent. I have taken to entering half way up the bar and resigning myself to missing some great moves in an effort to avoid the stop loss. I would be interested in hearing anyone else' strategies.
Are you using Stealth Trader's 3BR entry's? e.g., wait for the break of the 3rd bar in the direction of the trade, place limit order for a brief pullback in the 3rd bar and hope it gets hit and turn back in the primary direction? If so, I too have been frustrated with non fills on V shape reversals. You might never get a chance. On the other hand, if you leave the limit in the middle of the 3rd bar, it reduces your trade risk... but you could also use position sizing to accomplish risk reduction. I am trying to go with 1 car at breakout of 3rd bar and 1 car in the middle of the 3rd bar. All out stop at the extreme of the 2nd bar. It gets a little hairy to manage in the trade entry... but you will get at least the move up and out of the V shaped reversal in case it takes off from that pivot point.
Hmmm. I have been using the standard 3 Bar Reversal, entering on the third bar. I typically enter half way down the bar but I do get the frustrating no fills. I think I will try to look at a lower time frame and scale in a bit. I have been trading two cars so I could conceivably enter the first at the top, and the second half way down, as you suggest.
Thanks again.
Thanks again.
good thread