Ok, now we're going back to BO trading.
Today it's time for another BO out of my WIL and it's called Sandwich BO. I learned about this stuff from another trader.
This has to be one of the easiest, if not the easiest way to do BO trading. The concept is simple...it's a sandwich of candles where you have 2 different color candles smash into a sandwich. Who doesn't like sandwich? When I was a kid, mom's sandwich was the best. For a bearish sandwich the combination is a green candle inside 2 red candles. For a bullish sandwich, the combination is the opposite with 2 green candles keeping the red candle inside.
This post is a continuation of this SLAYERS post:
post154541#p154541...and the rest of the IB posts on that page.
Just like IB, this is actually an extension of IB BO trade, putting more confidence behind the direction. If you are not sure about the market bias, you can put 20 SMA in there. When I think about it, they are actually candlestick continuation patterns lolz
Now example...
- Sandwich BO.png (102.99 KiB) Viewed 2469 times
The vanilla version that I learn from him goes like this...
The suggested tfs are M5, M15, H1, H4 and also D1. However, the most used and favorite is the M5. His community also use this. But we love M1, right? lolz
The TP is your choice but he suggested at least 2R. If you think you can optimize or if the market allows, you can also try to target 3R.
Only use pending order. If you're late and the price also go beyond your actual entry point then you use limit order. Who knows, maybe the price will come back and take your order.
Bullish sandwich
1. 1 red candle inside 2 green candles
2. 2 red candles inside 2 green candles
3. 3 red candles inside 2 green candles
The final green candle must close higher than the first green candle's close.
Red candle must not close below the first candle's close.
For Bearish sandwich it's just the opposite
1. 1 green candle inside 2 red candles
2. 2 green candles inside 2 red candles
3. 3 green candles inside 2 red candles
The final red candle must close lower than the first red candle's close.
Green candle must not close above the first candle's close.
However, I put in some other variations there also because there is always those crooked patterns. I also added a filter to the 20SMA there and that is if any candle from the formation touches or close below or above the 20SMA then the formation is considered invalid. Of course, you can ignore this if you think it's better to do so.
Is there any other variations to this? Absolutely! If you have a thick WIL, I suggest you to modify this stuff. It could also be easily coded into an EA.
When you put the 20 SMA, you could also add this technique to Alias' Deadhorse. Try it. Could be fun
