Registered User
Joined: 10/7/2004
Posts: 43
|
To supplement the Cumulative indicators described in my note to Don Worden on 2/1 or what ever method you use.. No one indicator can make you a profit every time by telling you when to buy or sell..
You can improve your entries if you use the “faster” indicator when the “slower” indicator is flat line AND you have confirmation from TC’s volume related indicators BOP and/or TSV and/or MS but at a little greater risk ..
On the other end of the trade as stated in the note you should use some form of trailing loss cut.. Here is a little more information on how I sometimes do this which some may find helpful... I place 4 custom indicators in the top window which are related to my exit points but, also have some use for short term trading..
Add the custom indicators as follows, just be sure to check “plot using price scale”.. These indicators can be placed in any window.. However, I use them in the top (price) window because by placing them in this window you are able to get the $value for all of them by pressing the period key twice.. Just be sure that you have the pointer on the most recent bar... use any color you like I've included my colors only to make it easer to describe...
1st A green line - formula “C” - this just allows me to place a line chart on the top window along with my candles.. I use this line for my cross overs..
2nd An orange dot line - formula “C1-.2*(H1-L1)" - this takes yesterdays close and subtracts 20% of yesterdays range.. I use a cross over of this line as a warning for a trailing stop exit.. You can adjust the indicator to your current view of risk by changing the % ie: .2 = 20%, .5 = 50%, .75 = 75%, etc... if you are trading “short” which I don’t do often but, when I do I use this as an exit.. Never try to ride out a bounce on the short side...
3rd A yellow line - formula “AVGC6-((MAXH5-MINL5)*.1)” - this takes the 6 day average close (I use 6 instead of 5 which many people use, as it trails the 5 and reduces false exits) and then subtracts 10% of the max 5 day range (the difference between the highest high and the lowest low over the 5 day range).. Again you can adjust for your risk by changing the %.. I use this as a exit point if the indicator in the middle window is “flat line”..
4th A red line - formula “AVGC13-((MAXH5-MINL5)*.2)” - this is the same formula as the yellow line except the average is now 13 days and the % which is now 20%... This is the “get outa Dodge line” a crossover of this line is sell time no matter what the indicator says.. And is also the amount I use to set a actual stop loss order if I’m going to be away from my computer for a day or more although if my fear level about the market is high I some times use the yellow line amount..
5th In any case always error on the side of fear rather than greed... A little lost profit does not hurt nearly as much as a little lost capital...
Regards, Ken
(a.k.a. Sir Tisync)
|