MightyOne wrote:rushN4 wrote:PebbleTrader wrote:It's like what bredin said a few posts back:
bredin: "Looks to me like its ensuring that a single candle cant wipe out your position, giving time to reassess and adjust lots."
I think i understand it now.... if one candle closes over my line (if/then los) the Box should be big enough that the candle closes not over my 40% line
"you are giving up too much space for the TF traded if the candle close over the 40% line of your Box"
If your box were 10,000 pips would you draw your IF/THEN at the 40% RET when trading the hourly chart?
The IF/THEN is BASED ON THE CHART!
If you feel that you need to draw your IF/THEN above the 40% RET then you are on a chart that is too large for you.
In other words, the "40% RULE" is only there to stop you from doing something stupid.
It was clear to me that the if/then los line is based on the chart(ZL,S/R,Fatcat...) and is not the 40% RET of my Box.
the only thing that was not clear to me : how big my Box should be.
but now i think i know how to size it. The Box should be big enough that the 40% RET not get reached (after a candle closed above the IF/then los linie)