Thursday, August 4, 2011

Day full of large bars


When bars are large, your risk is large and although in proportion to each other the bars may look reasonable, your monetary risk is larger per contract so you need to adapt by reducing size. The other thing you need to do is to only take trades where the risk of pullback is low.

A2 on trend days when correctly entered, tend to have low adverse movement (b49, b69). Even though b69 was 4.25 points, its adverse movement was only 1.25 points. Other low pullback setups are W1P and G2.

Its best to avoid setups with large pullback possibilities such as inside bar reversal (b29) and two bar reversals (b10,11).

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