All pages | | | Today I had again the opportunity to meet Stephen Bargiacchi thanks to another free seminar held at | Trading Library. Unlike other meetings, all occurring in | "fast" basic skills, this time I got a little more prepared and motivated to assimilate content, and especially useful to steal what I could learn to start to work in simulation. Fortunately, a man who, in addition to the presentation of the platform | T-3 of Intesa Trade | , good Profste Science has also released, exposing in a clear, concise and practical approach to his work, which now, more for my utilities, and without the presumption to summarize perfectly and without errors or inaccuracies in the concepts and techniques that I had the privilege of learning today. profste Method is based on four fundamental principles of technical analysis, as outlined at the beginning of last century by Dow, Rhea and Schabacker: | A trend with strong momentum more likely to continue than to reverse. | should be better defined the concept of trend and momentum (thrust) that is able to predict the direction of the trend. Derivative of the price? (Carina this, we should construct an indicator of chela Express). Resultant of two forces Buy / Sell? | trends often end with a climax, that is, with euphoria or a capitulation. | should see graphic examples of | Momentum precedes price. The market upswings, often alternating with periods of contraction of range of range. | Operationally this is detected with such a long session with candle followed by another with a short candle, or better yet, a series of sessions featuring candles court followed by a series of long candles. should see graphic examples of | | Profste uses three methods to determine the entry into a trend already begun. The common assumptions for the use of these methods are: | Trend established: these patterns are to be found only within an existing trend and strong. They have no validity in any phase of the market side, or trends to be defined. initial impulse: the trend has to start in a decisive manner, it should be noted operationally a long candle (possibly without shadow) at the beginning of same trend. retracement: you must wait for a retracement of the trend before assessing the possible entry. If you detect a retracement, none of these patterns is applicable. Insert graphic example of retracement.
Before we establish the criteria for determining the point of entry, it is reasonable to determine the criteria for determining the Stop Loss, the First Target and Trailing Stop and Risk Reward
Stop Loss: for all three patterns, the Stop Loss is to be positioned near the extreme of retracement (in the case of the downward trend over the maximum retracement, where upward trend, in the minimum retracement) Insert graphic examples
First target: in this case, all three patterns, the first target to be attained is common and is represented by the retest of the pulse, that is, from the extreme 'impulse that started the trend (in the case of bearish trend, the minimum of the first candle at the beginning of a long trend, in case of bullish trend, the maximum of the first long candle to the top of the train) - Add graphic examples
Trailing Stop: Once you reach the first target, if you want to remain in place and not to exercise immediately take profit, turns this target reached in stop loss, in order to protect the level of profit achieved. - Insert graphic examples
- Risk Reward: it is a good idea to make a trade when the risk / return ratio is more than 1 / 2. It 's absurd to engage in a trade that are in danger of losing No. 100, compared with a profit potential of less than 200 or even less than 100!
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The three methods are detailed below: 6-OUT (Alan Farley)
Holy Grail (Linda Raschke)
Short Skirt (Linda Raschke) -
- In its simplicity, this method proves often very good. Special note: it is need a timeframe of time (15 minutes recommended by Profste), DO NOT use a timeframe n x-tick-tick or
(link to profste for n-tick) - Determined to be in the common conditions described above, the occurrence of a retracement, or a phase of the market side, we want to identify which is the time, if any, where the trend will continue, therefore to make an entry that gives a good chance of profit.
We follow the trend, and soon formed the first candle in the opposite direction to the trend, we expect the new ones. If after six candles does not end the retracement, probably the trend is already sold out. This limit is six candles similar to a Stop Loss Thunder . If, after a number god candles below 6, the trend resumes, there is good chance that at least up all'estremod ell'impulso.
Insert graphic examples -
So the entrance is the first candle to be made for continuation of the trend if the sixth of the previous retracement. Outcome Criteria, as well as the risk reward, which increase the motivation to entry into the trade: - Book / Volumes: look at the book (or in daily timeframe, look at the volumes). The retracement must effetturasi expressing a low, meaning a book that is empty or volumes in contrast to retrace
Candles: candles are shorter and more regular than the retracement is typical of the situation we seek. If even the candles are long smepre shorter length and in contrast to the retracement, plus the confirmation signal is positive. -
Holy Grail The method uses two particular indicators: - ADX : avarage Directional Index, Visual Trader called "Directional Movement", is an indicator of trends. Proftse should build it with 14 periods. EMA 20: Media 20-period Exponential
During the formation of the trend, it should be noted the value dell'ADX: if it is greater than 30 and is growing, then you can assume that the trend is established and is of adequate intensity. Once considered the established trend, expect a retracement of the price close to the EMA20. If after you see a continuation of the trend, then you may want to enter, providing for its continuation.
As previously indicated, the first target will be the end of the retracement and Stop Loss?? -
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- The short skirt is a version of 6-OUT applied to the chart with 1 minute timeframe.
It analyzes the timeframe to 15 minutes to identify the conditions established trend, with strong impetus. You pass Apoio 1 minute timeframe to wait for a retracement, and you adopt the strategy of the six outs.
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