Sunday, September 24, 2017 10:22:15 PM
UGAZ just some more back testing on the 1:2 risk/reward
After posting the charts below, All I can say is GOOD LUCK with the NG charts. It is a pattern traders nightmare! LOL
This is the latest edition of my current trading strategy.
I have adopted the trade formula as follows:
1. A full candle MUST form its body ABOVE/BELOW the trend line. This is the SIGNAL to watch for a confirmation as described in 2. (not a buy signal) Note: A trend line needs to be one that has been tested at least 3 times.
2. Price must then advance .10 above/below previous high/low of full candle
as described in 1 above. Best to wait until 2-3 candles after the break to confirm continued trend, this helps to avoid false breaks. This is the BUY trigger.
3. Stop loss is placed .05 below last swing low/high. (actual price of swing high/low is used to calculate exit target)
4. Use the 1:2 risk/reward formula for a profit target to sell or scale
out of position.
Formula for the 1:2 risk/reward
Risk (R) = buy trigger - previous swing low (on a break up)
OR
Risk (R) = last swing high - Sell short trigger (on a break down)
Buy trigger + 2R = target price for break to the upside
Buy trigger(to short) - 2R = target to cover short position
This would have been a short position or a buy favoring the DGAZ but would have gotten stopped out for a loss.
Another missed target, I put a fib on it to see if it came close to the .618 at least, which it did, could have used that as a target.
After posting the charts below, All I can say is GOOD LUCK with the NG charts. It is a pattern traders nightmare! LOL
This is the latest edition of my current trading strategy.
I have adopted the trade formula as follows:
1. A full candle MUST form its body ABOVE/BELOW the trend line. This is the SIGNAL to watch for a confirmation as described in 2. (not a buy signal) Note: A trend line needs to be one that has been tested at least 3 times.
2. Price must then advance .10 above/below previous high/low of full candle
as described in 1 above. Best to wait until 2-3 candles after the break to confirm continued trend, this helps to avoid false breaks. This is the BUY trigger.
3. Stop loss is placed .05 below last swing low/high. (actual price of swing high/low is used to calculate exit target)
4. Use the 1:2 risk/reward formula for a profit target to sell or scale
out of position.
Formula for the 1:2 risk/reward
Risk (R) = buy trigger - previous swing low (on a break up)
OR
Risk (R) = last swing high - Sell short trigger (on a break down)
Buy trigger + 2R = target price for break to the upside
Buy trigger(to short) - 2R = target to cover short position
This would have been a short position or a buy favoring the DGAZ but would have gotten stopped out for a loss.
Another missed target, I put a fib on it to see if it came close to the .618 at least, which it did, could have used that as a target.
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