How to trade using TRO's Dynamic S/R indicator

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scotty_dog
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How to trade using TRO's Dynamic S/R indicator

Postby scotty_dog » Thu Oct 19, 2006 7:55 pm

Hi there,

Having recently found this forum, I've only just encountered TheRumpledOne and his work. I'm glad I did - a lot of food for thought here.
First of all, many thanks to TRO & the Kreslik community for the kindness in freely sharing both code and expertise.

As a new trader with NeoTicker, I'm currently looking at TRO's Dynamic S/R indicator, as translated by Luke. It's seems a potentially very useful tool.
As such, I'd like to learn more about it and it's uses on short timeframe charts. Perhaps this thread can become discussion point for using this specific indicator.

So far, I understand there to be two main ways to trade it:


1. Go short/long on a breach of Dynamic support/resistance.

2. Go short/long at the midpoint of the current resistance/support range, on a large bodied candle of the same direction as the move, looking to capture half of the range.


However, I don't think I have anywhere near the complete picture yet. So I have a few questions, if anyone feels kind enough to enlighten me on one or all of them.
Using a 2min YM timeframe as an example. (I attach a PNG below showing this afternoon's action in the YM for reference.)

1. For type 1 trades, what trigger is preferable - a bar close outside the level or a tick breach of the level?
2. Generally, should one use a filter to only take long or short trades, depending on the underlying trend? (Are there TRO indicators for this purpose?)
3. Are there times it's best to avoid trading? E.g. lunchtime hours or certain market patterns/set ups?
4. What are the best exit strategies for short term trades in terms of consistency - profit target exits or a support/resistance trailing stop exits? Or a combination of both perhaps?
5. It may be my imagination, but, a lot of the examples shown in TRO indicator charts illustrate short trades. Are shorts better suited to type 1 trades?

Any thoughts, alternative strategies or corrections to the above warmly received.

Regards,
scotty_dog


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Postby jgear55 » Thu Oct 19, 2006 11:17 pm

also if somone could show specific graphic example of how to use the MIDPOINTs for a trade

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Postby watzdorf » Fri Oct 20, 2006 1:30 pm

Here is how I use s/r:

if price hits s/r twice -> go short/long at s/r
if price hits s/r only once, I take the low/high of that bar to go short/long.
in other words: if price moves above the high of the bar that created the support (s) ->short and vica versa.

I use mental stop 1 point above/below s/r

I don't use midpoint

hth

alex

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Postby scotty_dog » Fri Oct 20, 2006 3:17 pm

Thanks for the reply watzdorf.
Typically, what size of price target & stop loss do you employ with these trades?

Cheers,
scotty_dog

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Postby jgear55 » Fri Oct 20, 2006 3:54 pm

watzdorf wrote:Here is how I use s/r:

if price hits s/r twice -> go short/long at s/r
if price hits s/r only once, I take the low/high of that bar to go short/long.
in other words: if price moves above the high of the bar that created the support (s) ->short and vica versa.

I use mental stop 1 point above/below s/r

I don't use midpoint

hth

alex


your /'s make no sense can u explain better or use a picture is prices hits support twice -> go short? by twice do u mean 3 times the one that started the dynmaic support then 2 price touches and the for one time, the high/low thing doesnt make sesnse eaither can u represent in pictures, with mspaint or an actual chart? thanks!

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Postby watzdorf » Fri Oct 20, 2006 3:54 pm

stop: about 7 points
target: no target - I let it run

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Postby scotty_dog » Fri Oct 20, 2006 4:01 pm

OK, thanks. 7 points of what market though?
I forgot to ask earlier...

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Postby watzdorf » Fri Oct 20, 2006 4:07 pm

To be clear 0.1 % on stocks 1 min chart

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Postby jgear55 » Fri Oct 20, 2006 10:24 pm

anyone answer my Q?

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Postby TheRumpledOne » Tue Oct 24, 2006 5:14 am

Never ever enter at the midpoint... that is where you want to EXIT a bounce/retrace!!
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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