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In Al's article on "How to trade using the Always in Swing Trading Approach" dated April 25 2014, it said:
A) "whenever your are in a trade, always have a stop in the market, risking about 6 ticks. Once a trade moves at least six ticks in your direction, move your stop to breakeven or to 1 tick beyond the entry bar"
- Is 6 ticks still viable in today's volatile market on Emini with bigger average range bars?
- If the second bar takes out the entry bar, do you exit? Or do you only risk 6 ticks.
- How can I determine the equivalent ticks to risk on other market, such as Heng Seng Index Future?
B) Bar 37 has a small (bull) body and a big tail, making it a bear set-up and a possible failed breakout.
- Bar 37 is bull bar and is a doji, the big tail is below the body. I thought a bear set up should look for a big tail on top (above the body) for a bull bar or is a bear bar as more significant? So here even with a bull bar with close near the top but with a big tail below it is consider as a bear setup?
- I know it mentioned that it is close to a double top on a 1 min chart but is it important when trading the 5 min chart?
Thanks.
- Is 6 ticks still viable in today's volatile market on Emini with bigger average range bars?
In Al's chart the average bar was 2p so the minimun scalp was 1p but, yes, you should increase your profit and risk depending on the volatility. If the minimun scalp in your chart is 2p or 4p then you should use 10t or 18t instead, like in today's EMINI chart, for example.
If the second bar takes out the entry bar, do you exit? Or do you only risk 6 ticks.
If the EB is good you can place your stop-loss below (bull case). Alternatively, you can leave it below the Signal Bar.
- How can I determine the equivalent ticks to risk on other market, such as Heng Seng Index Future?
I guess you have to analyze the bar's height and the succesful setups to get a number but, I only trade the emini so I have never been needed to do so... maybe other traders can help you out on this.
- Bar 37 is bull bar and is a doji, the big tail is below the body. I thought a bear set up should look for a big tail on top (above the body) for a bull bar or is a bear bar as more significant?
Any bar can be a signal bar but obviously a bull bar is a bad bear signal bar, so you can increase your probability waiting to enter on the next bar closing on the low.
So here even with a bull bar with close near the top but with a big tail below it is consider as a bear setup?
Yes! Remember that the better the context, the less important is the signal bar so many times a bad SB still gives a decent profit if the context is good (Selling at the top of a TR). As I said, if in doubt, wait for a trend bar and then enter, sometimes you will get it and other times you will miss the opportunity, so do what better suits your personality.
I know it mentioned that it is close to a double top on a 1 min chart but is it important when trading the 5 min chart?
No when you are starting out, it is better to focus in one chart and don't mix time frames. Here you have a wedge at the top of a TR day so it is a sell, no matter what happened in the other time frames. Yet, the channel was tight and the signal bar was a bull bar so this lowered the probability for the setup. Next bar closing on the low increased the probability so better to enter there for a newbie. With time, you can start adding more info to your analysis and take into account othe time frames.
Thanks very much, Ludopuig.
