Wide Range Bodies or 'big' candles

[BlowFish]

	Quote:	brownsfan019
	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]

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]

	Quote:	brownsfan019
	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]

	Quote:	BlowFish
	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]

	Quote:	brownsfan019
	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]

	Quote:	PivotProfiler
	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]

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]

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]

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]

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.