BambinoFlex wrote:aliassmith wrote:BambinoFlex wrote:I've had a few dreams of me trading. In the latest dream, I heard a voice say something a long the lines of "When the three align, price will move the strongest" or something about the three being one..I don't quite remember. In the dream it was referring to the Semafor, 1hr, 4hr, and the daily. Anyways, I've been chewing on the "pointy things" idea. I've seen the outcome of being able to trade off those extremes, but the problem is where will the extreme form. Looking at the "pointy things" I have noticed that when the 1hr, 4hr, daily all have a semafor, when price trades away, you get the "pointy things". Since price is fractal, I'm sure the same can be said of smaller timeframes.
This brings me to UJ. Currently, UJ is trading in "extreme" territory. Not only did it break the previous weeks low, but it's a few pips under weekly R2. Makes me wonder if this is an extreme. I will watch. My idea is to enter at a 1hr break low (price turn). My Expectation would be for a bearish day...a very bearish day...probably closing well below yesterdays midpoint. The following week, I would expect price to create a Higher Low Sunday - Monday and then continue lower, reaching S1. This idea is all dependent on Friday's close. If it's a weak down move (no momo) then I would expect next week to simply break this weeks high. In my opinion, with MM, it's worth the risk. As MO put it, a statistical expansion..or something like that.
When MO was trying to catch extremes I belive he would over size his risk box then add like a beast when it moved in his favor. Depends on which method.
Trailing a stop loss he normalized risk.
Add normalize add normalize etc
Then the more complex method was a series of adds and closes until price eventually expanded. He was also trying to increase size while keeping his stop loss outside of the extreme.
I read through his stuff again and I think you worded it correctly. His first step when trading off an extreme (seems that weekly was a preference?) he would have a larger stop loss. Of course he didn't trade with a stop loss but its to keep the ideas linear with those that do.
Once price moved in his favor, he would "reduce his box size" allowing him to increase his position. This is where he would show a box size of 8 with an entry of 5 lots and then show a box size half of 8 (4) and a new max lot of 10.
He also started using daily or daily+