BUY ZONE FOR DUMMIES INDICATOR

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TheRumpledOne
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Postby TheRumpledOne » Mon Mar 17, 2008 1:50 pm

When the activity is low the spread is usually wider. Better to trade during the active times.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

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Postby eudamonia » Mon Mar 17, 2008 5:10 pm

Wayne,

As Avery mentioned, trading during more active time frames will help you (in more ways than one). I am a big fan of when there are multiple markets open (i.e. London and NY). Good luck.

Edward
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Postby greaterreturn » Mon Mar 17, 2008 6:13 pm

Thanks. I plan to take Sunday afternoons off from now on and stick to trading the New York / London combined times as usual.

FYI, last night, I made back the loss plus an extra $100 bucks after I selected to the "traded through" preference for stops on MBT Navigator.

It definitely works more smoothly during the combined hours. Like this morning I made another 21 pips.

TRO, the Buy Zone is very cool, it seems I understand the genius and simplicity of it better each day that passes.

By the way, I like a 2 to 1 risk/reward better. So I use a TTO with 21 pips TP and 7 pips stop. After it hits 5 pips profit, I replace the TTO and move the stop up by 5 pips, I do it again at 10 pips and 15 pips. In other words, I use a 7 pips trailing stop along with the 21 pip TP.

That way, if it doesn't make it to 21 before a reversal, I at least make a small profit. It does take slightly more patience but I usually get the 21 pips before I call it day. I want to automate this so the compute can trail the stop for every pip change.

Any advice?

Sincerely,
Wayne

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Postby TheRumpledOne » Tue Mar 18, 2008 12:15 am

"By the way, I like a 2 to 1 risk/reward better. So I use a TTO with 21 pips TP and 7 pips stop. "

FYI: 2 to 1 would be 14 and 7.
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Postby greaterreturn » Tue Mar 18, 2008 2:08 am

Tee hee. I realize 21 and 7 looks like 3 to one. The reason I call these 2 to 1 is because I have the "traded through" preference set for stops.

That means that 7 pip stop could potentially be at much as a 9 to 10 pips loss with buy/sell spread slippage and the commission cost.

I don't like the "first touch" option because the 7 pips is so tight of a range.

That means my total potential risk is around 10 or 11 pips.

So I want my reward to be double that or 20 pips + 1 to cover the MB Trading commission.

If I did 14 to 7 and my max loss is 10 or 11 pips, then I'm barely over 1 to 1.

Hope this makes more sense.

Wayne

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Postby greaterreturn » Tue Mar 18, 2008 2:11 am

FYI, Admittedly, I learned this when the spread was averaging 3 pips on a low activity day. But I noticed this morning on Level II that even the USD/CHF during dual session times after the New York open can have 2 and 3 pip spread briefly during a quick move.

Wayne

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Postby greaterreturn » Thu Mar 20, 2008 5:22 pm

TRO, please help. Or anyone else successfully using the Buy Zone. Can you discuss the pros/cons of trailing stops?

My trailing stop plan backfired today. Twice, during the 7 am hour and the 8 am hour, the market took out my trailing stop and went lower.

It was channeling so it didn't hit my 21 pip TP either. However it would have hit the 10 (or 11) pip TP of the basic Buy Zone.

Trailing stops seem like a great idea but any feel if they work well over time?

I'm considering dropping them and just sticking with the 11 TP 7 SL strategy.

- Wayne

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Postby eudamonia » Thu Mar 20, 2008 6:10 pm

Wayne,

Trailing stops are very effective in certain market conditions and less so in others. Correctly assessing the market conditions (i.e. weak trend, strong trend, noisy range, clean range) is crucial for determining whether your stops are appropriate or not.

Over time it is my feeling that trailing stops do indeed work (even without this filtering), however, you will have to experience many times when you are stopped out without a profit. Does this appeal to your trading style, psychology and risk tolerances? Only you can determine that for yourself.

Good luck.

Edward
Eudaimonia (pron.: you-die-moan-e-a) (Greek: εὐδαιμονία) is a classical Greek word commonly translated as 'happiness'. The less subjective "human flourishing" is often preferred as a translation.

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Postby greaterreturn » Thu Mar 20, 2008 10:20 pm

Thanks Edward.

Another question for anyone:

I have, including today, missed the sell zone or buy zone entry because the market moved quickly and it takes me a number of seconds to enter both the stop loss and stop limit price into MBT Navigator.

How do you handle the mechanics of this?

I'm researching ways to automate the initial order entry and then I can manage the trade from there manually.

Please share how you handle reacting quickly when the new hour starts and you have to enter in the stop limits quickly.

Wayne

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Stochastics PMSM

Postby traderduke » Sat Mar 22, 2008 3:47 pm

TRO
Earlier in this thread you have a ELD called FSTOCH.ELD but the download link can't find the file. Is there any chance it can be reloaded? I didn't see it in any motherloads.

Thanks

Ray

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