Just thought of something while mulling the Engulfing Bar entry thing. If you know you are going to have an EB form, then for eg, if it's going to close as a long entry at the high break, why would you not simply enter at the close of the bar and add those extra pips between the close level and the high?
Mr. Hyde wrote:
I'll have to look at that for sure. Thanks. I really like basic candlestick patterns at key price levels. They work real good and require little thought.
When you say trigger bar are you talking about the engulfing bar itself or the candle that comes after.
The engulfing bar.
Yes, I know you take the risk that it wouldn't have gone on to be a break but if the strike-rate is high enough - which it seems like it is - then any fails would be more than covered.
Need to investigate that more - specifically because it is going against my usual WZ rules.
Got a perfect example for me to work with this morning with my DAX trade.
I run a two-hour block (06:00 - 07:00 and 07:00 - 08:00 bars uk time) and this morning had the second bar as an engulfing bar.
Everything else was telling me to Short at the entry - and that, of course would be the WZ entry. However, as an EB, the second bar closed Long, so the play there was to go Long at the break of the High. Mmmmmmmmmmmm...Well, I did ask for an example to check it out, lol.
As it turned out, I ran it as my usual play and took the Short back inside the body. Got my percents and more. Sorted.
Now, here's where it gets interesting...after all that was said and done, price did turn and went on to break the High.
Sooooooo...maybe (and as far as I'm concerned) the play is, take the WZ play as the first option, then be aware that any move may be short-lived and will eventually turn and follow EB rules. (Of course, a long break of the extreme is also
a WZ play, so there's that
It does, however, knock the idea of taking a pre-emptive entry at the close of the EB on the head. I can live with that.