Triantus Shango
Sergeant Major
- Messages
- 1,371
damian, re. the trade you mentioned as an example, i just would like to make the following observations:
regardless of whether or not there is a K-area:
1- if you use the bollinger bands, and price is still walking the band when reaching whatever K-area or agreement or whatever level someone believes is significant, then stay with the trade or at least do no initiate a contra-trade;
2- observe (1) if price has not crossed MACD Predictor yet;
3- if price is starting to drift away from band std dev 3 or 2 towards band std dev 1, start getting ready for a possible swtich in sentiment/direction;
4- if price crosses MACD Predictor and continues to drift towards mid BB, or if mid BB is reached and then price crosses MACD Predictor (even better) AND other TIs such as DPO or slow Stoch also show a turn in direction, then start thinking about initiating the trade BUT
5- always by taking into consideration the price's position relative to 100 and 200 MAs and key fib levels (this defines a risk context), meaning that if price is walking the band, for ex., but finds SPPT or RSST at 100 or 200 MA, consider initiating a trade AS LONG AS other TIs and fib levels paint a picture that makes sense; trade risk at that point is well defined; if wrong, then continue walking the band.
had you done this, you would have let it ride 'til 253x, then reversed from there.
i cannot emphasize enough how important and useful bollinger bands are. cheers.
regardless of whether or not there is a K-area:
1- if you use the bollinger bands, and price is still walking the band when reaching whatever K-area or agreement or whatever level someone believes is significant, then stay with the trade or at least do no initiate a contra-trade;
2- observe (1) if price has not crossed MACD Predictor yet;
3- if price is starting to drift away from band std dev 3 or 2 towards band std dev 1, start getting ready for a possible swtich in sentiment/direction;
4- if price crosses MACD Predictor and continues to drift towards mid BB, or if mid BB is reached and then price crosses MACD Predictor (even better) AND other TIs such as DPO or slow Stoch also show a turn in direction, then start thinking about initiating the trade BUT
5- always by taking into consideration the price's position relative to 100 and 200 MAs and key fib levels (this defines a risk context), meaning that if price is walking the band, for ex., but finds SPPT or RSST at 100 or 200 MA, consider initiating a trade AS LONG AS other TIs and fib levels paint a picture that makes sense; trade risk at that point is well defined; if wrong, then continue walking the band.
had you done this, you would have let it ride 'til 253x, then reversed from there.
i cannot emphasize enough how important and useful bollinger bands are. cheers.