[walterw]

Ok.... I keep presenting my aproach that leads me to a good RRR.... and this is M trades from my dynamic levels...

I previously presented the advantage of M patterns in order to have a good RRR and I did present what levels I take into consideration (Outerbands and Mid Band) and what I do from there (Refresh to the mid band, Reject of the mid band ) now I present how I combine M patterns in this entire context.... I attach a Theoretical explanation...

What we basicly want is this M formation at the outerbands in order to refresh to the mid band "Refresh Trade", and we want this M formation at the mid band in order to reject to the outerbands "Reject Trade" ....

[walterw]

So... how do this M`s get formed ?... well believe it or not... I need noise for this¡¡... noise can be very handy for this setup... so I use a smaller time frame to get this noise and start to see this M formations... I attach the theoretical formation of this M on 22 T chart and example charts...

On the first example I pretend to refresh from the outerband to the mid band on the 110T chart, now you can notice its hard to see an M formation on the 110T chart because information its too compressed there... as I decompress information to a 22 T chart I can clearly see how this M gets formed and how it can help me to get a competitive entry in order to have a good RRR...

more examples attached... cheers Walter.

[ant]

Walter, I really like your ideas here, especially trading off the "M" or "W" pattern with good RRR and using the Keltner channel bands for targets. Sounds like a winning strategy. One comment I have is on the implementation itself and using the 110T and 22T charts. It seems like there are a lot of other "M" and "W" patterns that actually form pretty clearly on the 110T and 22T charts. However, you seem to trade patterns on a 22T chart that you really have to squint to see. I couldn't help asking myself is, "is that really an M or W pattern in the 22T chart?" Also, do you trade bigger M or W patterns that form on the 110T chart for a bigger target?

[walterw]

Ant, I really dont use the 110T chart as I trade, I am only showing the trendbands that come from that scale, and the concept of refresh and reject... I actually just focus on the 22T chart for my trading... (the trend bands on 22T are the same from 110T ) M and W are all over the chart... I really dont look for M`s Its too tricky to do so... the "1rst intention" (I call it) its what gets the pattern started... and that is the "crossing" of the trigerlines (blue/red) near to a dynamic level...(outerband,midban d) so its not just looking to all the M`s that get formed, you can loose your mind trying to do so... now once you had that "1rst intention"... the pullback to the area off the triggers gives you an excellent entry oportunity... I like your feedback and I would like to get more feedback on this formation, always taking into consideration the RRR as the central topic... remember RRR = live or die... you cant survive on this bussiness if you loose the same that you win...

[ant]

Originally Posted by walterw »

I actually just focus on the 22T chart for my trading...

I guess timeframe is a matter of preference. I prefer to use a larger timeframe to catch a bigger moves as well as move away from the "noise". I'm not sure I agree/understand why you want to trade in the "noise" or how it helps. These "M" and "W" patterns are basically double tops/bottoms that occur because buying/selling dry up in the timeframe that you're trading. Why is the noise important? It seems that the noise would hurt you by having your tight stops hit more often.

Originally Posted by walterw »

I really dont look for M`s Its too tricky to do so...

Can you elaborate here? Why are M's trickier to trade? It would seem to me that trading the "W" pattern within a trading range would get you chopped to pieces, but would work nicely in a trending market. I would say the opposite for the "M" pattern... That is, the "M" pattern would work out better in a rangebound market because you would be essentially trading near the limits of the trading range and looking for a trade back to the middle of the range. In a strong trending market, the "M" would get mowed over, similar to a divergence.

Originally Posted by walterw »

the "1rst intention" (I call it) its what gets the pattern started...

Walter, I don't think I understand what you mean by first intention. Are you referring to the first peak of the "M" or "W" pattern?

Originally Posted by walterw »

its not just looking to all the M`s that get formed, you can loose your mind trying to do so...

I agree that one should not try to trade every pattern on such a small timeframe. I guess what I was trying to say was that there seem to be higher quality "M" and "W" patterns that I would have traded before the ones you picked out, but I think I may be missing something here related to the setup...

I do look for double tops/bottoms in my trading, but instead of using the Keltner channel for entries/exits, I use key reference areas from Market Profile. By the way, I like using the Keltner channel, but I use it for other purposes. In fact, I usually have it up on one of my charts.

Good thread Walter... thanks again for sharing...

[walterw]

Ant... I think you are not really understanding the overrall Idea... as I stated on the first posts this technical aproach can be done on the speed universe you feel confortable... it can be 22T or 220T... doesnt matter, when I refer to M its all off them M and W... if you watch slowly at the M pattern formation excel spreadsheet you will notice that when the price "crosses" the triggers ("1rst intention") at a key level ( in this case Outerbands / midbands) you can use MP levels, pivots, fibbonaccis etc... when we pullback to this triggers, we got an RRR oportunity.... it may work, it may fail... BUT you got a RRR about 1:5 most of the times... so if you get 50% of the time cooked... you still make money thanks to the RRR that this entry provides... one more thing you pointed out on trending conditions is that you dont want to trade a refresh trade from the outerbands when market is trending... you must clearly detect signs of a cycling market to take a refresh trade... Refresh trades are countertrend so you dont want to take them on trending conditions...
About noise: it took me 2 years to understand the fact that when you decompress data and use decompressed data for your entry and then you trail your exit with compressed data you got a tickett to an excelent RRR..
My entry vs my stop is in 22T.... but my entry vs my exit is in 110T ... that makes a great difference on RRR... believe me... lets say you are confortable with a 30min chart ok.... make your enrty on a 5min chart and trail it on a 30min... and see what RRR you got...
let me share an example derived from a fixed level... and let me see if I can make it more clear... thanks for interacting... makes possible to enter on the details that a monologue cant make...

[walterw]

this is what a 3T chart can do for you... with 110T indicators...

[torero]

If your trail stop is higher timeframe than your regular timeframe, wouldn't it exit late?