My Entry vs My Stop vs My Exit

[walterw 10]

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.

M Formation on 22 T Chart.xls

[ant 10]

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 10]

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,midband) 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 10]

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.

 

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.

 

 

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?

 

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 10]

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 10]

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

[torero 10]

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

[walterw 10]

Torero: cyan and yellow are derived from 22T speed and red/blue averages are derived from 110T... in the above example I trailed the long trade till I croosed the blue lines ( exit)... on the second short... its still open below the red lines....

 

M`s are formed with the cyan/yellow from key areas... whatever you like most... (fixed or dynamic) at the "triggers" blue/red.... then once in the trade your stop is tight below the triggers... and your trail is long... with triggers...

 

your risk is on a 22T speed universe, your reward is on a 110T universe... but you only look at one 3T chart...

 

Reasons for 3T chart : I actually read the tape with that speed universe... you can feel when its flowing or not.... it takes a lot of screentime to understand the benefits of using this scale... but russell demands it... it has a very wide range and great volatility... you need to see what is happening really... thanks for interacting... do you speek spanish ? I am from Argentina... cheers Walter.

[cfrn 10]

i fell like i've stepped into another universe even though i've been trading for some time..............

 

i understand a 3 tick chart

and a 22 tick chart

and a 110 tick chart

 

but how do you get them all on one chart?

 

i use

tradestation and realtick for charting

and transact for execution

 

also the red blue lines......... what are they?

 

i'm brand new to the forum and am guessing u guys are using a different charting package

 

i'm ct from Welcome To The Christian Financial Radio Network

 

please enlighten me so i can enlighten my listeners

 

blessings

[walterw 10]

Well cfrn, I am pleased to hear from you, Thought we are not supossed to make any religious commentaries on this forum but I think I am free to express that I am from your same christian belief...

 

As to the 3T chart... you can use it or not... its just an increment on your visual perception of whats happenning inside the futures price action... some people prefer not to see to much whats happening in that "noise" inside...

 

The true pattern I discuss here is the M pattern wich gives you an excellent RRR and it responds to a great reality that the market is most of the time in a cyclic performance (80%) more than a trending performance... so in that cyclic performance M`s come on the way to give you multiple oportunities to trade...

 

One of the ways to detect this M`s is with the "triggers" red/blue lines, they are a Linear Regresion Curve (or Least square Moving average) 20 and a signal exponential average 5 of the previous one... all this in a 110T chart... now I traslate this to a 3T with this parameters: 740/185 so you got an indicator from 110T in a chart of 3T.... dont need to be looking at a 110T chart...

 

In previous posts from this thread you can see how I look for M`s with this lines...

 

on the other hand I am developing an easier way to trade this M`s and just using a 22T chart that I will share soon on this same thread... cheers Walter.

[cfrn 10]

Thx Walter.

 

Do you know if this can be set up on a Tradestation Chart?

 

Thx

CT

[walterw 10]

Yes CT, when I share my new strategy I probably will share tradestation indicators too... cheers Walter.

[cfrn 10]

Great!

 

I gave it a whirl and came up a few fries short of a Happy Meal.

 

I'll be waiting............

 

Thanks Walter

[walterw 10]

Ok, so I am back for some more Technical Analysis.... this is in relation to M trades... maybe we could rename them as pullback trades, because this trade actually pretends to pullback to the triggers in order to take the trade at this "sweet RRR spot"...

I attach again some examples of this trade... let me recap the entry secuence: _1rst we cross the triggers (blue /red lines) _2nd we pullback to them... (entry area) _3rd Stop is above/below triggers and _4th our trail is the triggers until we crooss them again...

[walterw 10]

Some more examples using 22T chart.... I might say that it looks easy but it takes a lot of screen time to master it...

[walterw 10]

Now in continuation to this I add the tradestation indicators that I use to find this pullback trades... I must remind that I take this trades at "key Levels" they can be Dynamic (bands) or fixed (mp levels, pivots, fibonnacci etc) as expressed on previous posts...

 

enjoy, cheers Walter.

PULLBACK TRADES.ELD

[walterw 10]

Here I add a nice example today of a beautifull M trade at 3 Tick chart, I did experiment using Force Index at this scale.... nice divergence right on the top of bands... cheers Walter.

[SorryForMyEnglish 10]

Walter,

I am just discovering TL web ....and since 2 days now I have studied in depth the 30 pages of your excellent post "Forex Trend Trades" (Icon/VMA) and now tonight, (its 2 am in france...) it's again a true happiness to read this post about RRR...

Your strong competencies, the way you explain, the way you teach, the way you share...make you an exceptional and unusual character !

 

MANY THANKS for your time, availabilty and everythings you give here ! (and in your close environment most certainly...)

MUCHAS GRACIAS HOMBRE !!!

 

Compliments and best regards,

Serge

(impatient to start reading another of your posts....)

 

ps : I'm already sure that I'm at the right place here to come across great value people/traders... and by the way, I'm happy to join the "Sorry For My English" Club...

[Reaver 10]

Walter,

I am just discovering TL web ....and since 2 days now I have studied in depth the 30 pages of your excellent post "Forex Trend Trades" (Icon/VMA) and now tonight, (its 2 am in france...) it's again a true happiness to read this post about RRR...

Your strong competencies, the way you explain, the way you teach, the way you share...make you an exceptional and unusual character !

 

MANY THANKS for your time, availabilty and everythings you give here ! (and in your close environment most certainly...)

MUCHAS GRACIAS HOMBRE !!!

 

Compliments and best regards,

Serge

(impatient to start reading another of your posts....)

 

ps : I'm already sure that I'm at the right place here to come across great value people/traders... and by the way, I'm happy to join the "Sorry For My English" Club...

 

Don't apologize for that! Welcome to the forums!

 

Like James (Soultrader) once said "traders speak with charts".

 

Have a good one.

[walterw 10]

Walter,

I am just discovering TL web ....and since 2 days now I have studied in depth the 30 pages of your excellent post "Forex Trend Trades" (Icon/VMA) and now tonight, (its 2 am in france...) it's again a true happiness to read this post about RRR...

Your strong competencies, the way you explain, the way you teach, the way you share...make you an exceptional and unusual character !

 

MANY THANKS for your time, availabilty and everythings you give here ! (and in your close environment most certainly...)

MUCHAS GRACIAS HOMBRE !!!

 

Compliments and best regards,

Serge

(impatient to start reading another of your posts....)

 

ps : I'm already sure that I'm at the right place here to come across great value people/traders... and by the way, I'm happy to join the "Sorry For My English" Club...

 

 

Glad to hear that Serge ¡¡ its nice to share and also receive a lot here at TL... interaction and collaboration is a great tool for growth, so feel free to interact ¡¡ cheers Walter.

[Sledge 13]

Like James (Soultrader) once said "traders speak with charts".

 

That is one kickass quote! I like it!