Prospectus's Post
@StreetSmack: How do you define an "offset" as labeled in your charts?
12 Replies:
Generally the real body is equal to or greater in size than the previous red real body
Do the tails matter?
You will notice in most charts that I like to use the highest green close and/or high of the last 3 candles as my line in the sand. If I get a green close above or very close to that line then I will go long above the high of the trigger candle.
Also, I see some "hammers" that I would have taken that didn't work out. Should a hammer have at least a 3 to 1 tail to real body ratio?
Basically I do a 3 bar count. For example....the first green candle is my 1st count, then I look for two more candles (red or green) after the first candle. If any of the two following candles are green with a higher high then I reset my count to the most recent green candle. Red candle wicks can be higher (not preferable) than the first or second green candle high. I will take a higher green candle if it is a solid hammer or a full expansion candle with high V.
Re: Line in the sand--so you don't always use the opening range high as your "line". Interesting. Do you measure your fibs from OR high to prior day's low (like Trader-X)?
I like to see hammers @ roughly 2:1 ratio and prefer them to form at or near the breakout high area, INR or at the bottom of a pullback. Some simply won't and don't work out, nothing is 100% but that is why we have risk mgmt stops.
Ah, so you're waiting to see the hammer or offset bar complete, looking for above average volume on that bar before you consider it to be an entry signal, and that trigger bar must be close to or above your high water mark (highest green close and/or the high of the last three candles). Sounds like a good strategy! I'll be trading just gappers on the 15 min today, like you said yesterday.
I use the ORH or ORL as my range only. Setups can happen anywhere on the chart (IOR, above ORH or ORL or extended above or below the ORH/ORL). The charts I sent you happen to be setup @ or near the ORH/ORL. I have more that setup IOR and extended. I will usually draw FIBS as you mentioned unless a price peak happened outside the ORH/ORL. I will then use the price peak or highest/lowest close as my FIB 100% line and today's low/high or previous day low/high as my FIB 0% line. Depends on how big the gap was.
Thanks, Street! I'll have your charts up on MtM shortly, and feel free to leave comments there if you want to answer questions or expound on your charts.
Yes. You have the general idea. Nothing works all the time but if you study charts and look for those kind of setups you will see a big improvement in your trading results as long as you don't exit out of fear. I also use a trailing stop method in most instances that can help preserve gains. I can send you an email later describing how I use stops. Remember, this is my method I use with success, there are plenty others that work as well or better. This is just one strategy I use day to day among others.
Thanks, that would help a lot. I come from a unique background in that I was daytrading without enough capital (under 25k) so I got nailed by any failed setups. I had one setup per day that I could choose, and if it was wrong I was shut down for the day. I'm still fighting my "need to be right", and the things you've shared will help me. Thanks again! I love Wallstreak!
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