Don_xyZ wrote:On a strong downtrend, the bullish zz will be pushed down over and over and over again and vice versa. So it's not the answer to your worry.
What you need is a clear market bias and the courage to take the trade based on that bias. Of course, you won't get it right 100% of the time and this is where money management steps in; to guard you against catastrophic losing streak.
Some questions you need to answer:
1. When does a bias start?
2. When is it at its prime?
3. When will it end?
4. What constitute a good bias?
5. How can you benefit from good bias?
6. How not to waste less-than-good but not-too-bad bias?
If you want to have a monstrous R, do the same but on a bigger time frame and let this big tf be the TP for your entry. So you will use the info from the big tf and enter from the small tf. Nothing fancy.
If your bias is good, you can enter a position just about anywhere (though you'll have varying R as a result). Heck, you can even enter a position while the latest candle is still midway.
I'll admit that bias was always an issue for me. Trading with a higher TF candle color sometimes solved that problem sometimes BUT then that one closed I'd lose confidence because I'd see it flip/flop over the next couple of minutes.
Funny thing is I was never a fan of the moving averages, or pretty much anything that requires to set a 'period' for a formula because I wouldn't know how to use a period that worked for me. But so far the 20 makes sense on my charts and it's helping with bias.
Regarding those questions, based on what I see on the chart:
"1. When does a bias start?"
When the SMA has been red or green for a while. I don't feel too confident when it's just turning; because it could simply start to range. And I'd prefer to see that it's not ranging before I acknowledge the bias.
2. When is it at its prime?
When the SMA is at a deeper angle. Seems to go hand in hand with momentum and strong moves in that direction. Yes anything can happen but I'm better off going short when price is dropping like a brick for example.
3. When will it end?
That one I wouldn't know. I guess it's my first answer but backwards; when the other direction has started to run and price isn't in a range, but that's after the fact.
4, 5, and 6 I don't have answers right now; I'm treating them the same (a good one vs a not-so-good one) and just trading them anyway.