almo replies to: Higher Edge within a Single Candlestick


CP method, not difficult to understand, use longer timeframe as filter and lower timeframe as entry, for exit, to be safe can use only lower timeframe signal to exit. since every reversal grow from smallest tf.

The fact that he keep mentioning trade with the trend already give a big clue, since the other trading style of fading momentum require a trader to know when exactly the momentum stop after he entered, there is no indicator that can predict that, it takes predictive thinking in order to trade that style, so it certainly isn’t CP style considered he use his indicator to calculate.

The fact that he is trading from the smallest increment price move already indicate that he trade trend, reversal, retracement, from a trader on a higher timeframe perspective.

Alright he also mention, he trading style lose its effectiveness on higher timeframe, well for this I have a different opinion, but I can understand why he think that way, the rationale behind this is the smallest tf capture the slightest move of the price, so if someone really have orders to work on, a slightest move have more chance to continue if the orders are really real. However, it doesn’t mean that a big move on higher tf won’t result in a similar move after a pause at a later time, it all depends.

Well, how far the longer timeframe filter one want to use will depend, but I suspect anything on 1h is enough, calculate the standard deviation of price move from 1h, 30m, 15m, 5m, 1m, and tick, all those commonly used timeframe, once all signal reach a certain standard deviation, enter. Since he applied longer tf, sharp price spike that immediately reverse will not cause longer tf to move, thus avoiding fake out.

But still there is a problem, once position is entered even all timeframe signal have confluence, there is no guarantee that price will not reverse, this is why a trader have to cut loss fast based on the signal of smallest timeframe, since longer timeframe signal is lagging.

Of course he can also compare signal of different currency pair together so he is more certain about a current momentum move, that is basically what I think he is doing, am glad to hear everyone insights.


Facebook Comments

Comments are closed.