the three step trade
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Thread: the three step trade

  1. #1
    Many people have asked me how to have the longer, often more profitable transactions. It happens to many uswe get trapped in trading little time frames that we miss the larger chances. I have devised a set of objective rules that lots of successful traders follow and would like to take the opportunity to share it with you. It's founded on three measures, alert, confirm and enter.

    If you have some constructive criticisms, suggestions or questions, I would love to hear from you. You may email me at.

    SETUP

    As its name suggeststhis egy simply requires the 1hr chart. I'm using same template that I have discussed in my own thread. However, you can set it up using the next configurations:

    Moving Averages (MA):
    Simple 80
    Simple 200

    CCIs: 21 84 with 0 as a level.

    Step 1- Alert
    Look for the cross of the two moving averages. If they cross, you are simply seeking to take a position in the direction of the 80ma. So if the cross has occurred along with the 80 is above the 200, you are simply looking to get a long.

    Step 2- Confirmation
    The 84 CCI has to maintain positive if you are looking for a long and in negative if you are looking for a short.

    Step 3- Enter
    Wait for the 21 CCI to split the 0 level in the opposite direction which you plan to take a position. Then as it divides the 0 level again in the direction you are seeking to take a position, you enter.


    Stop Loss Amount:

    Your stop loss should be above/below the substantial high/low on the exact same 1 hour chart. Ideally, this should be above/below the cross of the moving averages.

    Exit:

    Exiting a trade is a more personal thing. Based on this egy you would exit the trade when three candles shut above/below the 80 ma.

    Cases 1

    Can I propose opening the”threestep-no trade” chart which is attached.

    1 Alert- You can see that we had the cross of the moving averages, so you would be looking for a long position. (1st vertical line)

    two Confirmation- Please note that the 84 CCI has broken down under the 0 line (2nd vertical line). Thus you would not be seeking to continue. The 84 CCI MUST be positive for a long haul.

    3 Entry- Hopefully you will be thinking”what entry”, precisely, there is no entrance here. Start again.

    Example 2
    Gently open the 2nd chart”threesteptrade”.

    1 Alert. You may see that we have had the cross of the moving averages (1st vertical line). What are you seeking to trade? I hope you are going to be shouting”short”. Fantastic stuff.

    2. Confirmation- the 84 CCI remains negative.

    3. Entry -- The 2nd vertical line shows where the 21 CCI breaks into positive and then falls bellow the 0 line and that is your entrance at 108.70. (break of the support line was a potential entry if you're quick)

    Stop Loss- in 112

    Exit- you would still be holding this trade as three candles haven't closed above your 80 ma.


    Back test it and allow me to know what you think.

    Regards,

    Hemal

  2. #2
    Quote Originally Posted by ;
    here is your pics mentioned above. .
    Dont know about anybody else but I'm really confused here and wtih charts

    wat would be the blue and red lines on the charts, I think if tahts expalined we might get somewhere

    tahnks
    paul

  3. #3
    Hi Paul,

    The red line is the 4 hr 20 simple moving average, the blue line is the 4hr 50 simple moving average.

    Regards

    Hemal

  4. #4
    Quote Originally Posted by ;
    Hi Paul,

    The red line is the 4 hr 20 simple moving average, the blue line is the 4hr 50 simple moving average.

    Regards

    Hemal
    hi Hemal,

    so You've started using a 80 200 sma that are not on the charts displayed and the two bold lines on the charts are a 4hr 20 sma a 4hr 50 sma

    dont know if I am being stupid but I dont know

    apul

  5. #5
    Query in line

    Quote Originally Posted by ;
    Step 1- Alert
    Search for the cross of the two moving averages. When they cross, you are simply looking to have a position in the direction of the 80ma. Therefore, if the cross has occurred along with the 80 is above the 200, then you are simply looking for a long.

    Step 2- Confirmation
    The 84 CCI must be in positive if you are looking for a lengthy and in negative if you are looking for a brief.

    Step 3- Enter
    Wait for the 21 CCI to split the 0 degree from the opposite direction that you plan to have a position. Then since it divides the 0 degree again in the direction you are looking to have a place, you enter.

    Does it need to break the 0 degree after the 80/200 MA Cross?

  6. #6
    Paul that they are precisely the exact same moving average...

    A four hourly 20 moving average is just like a 1hr 20. (20x4=80)

    A four hourly 200 moving average will be just like a 1 hr 50 (20x4=200)

    that's the point. The setup with my moving averages allow me to view the bigger picture whilst having the ability to enter on a 1hr chart. If used along with this CCIs, it can be a powerful egy. I've used it for over 18 months with some good outcomes.

    Does that make sense?

    Regards

    Hemal

  7. #7
    Hi Ronald,

    The cross of the MAs would be my preferred option but I do know of a few traders who do not use this rule.

  8. #8
    Quote Originally Posted by ;
    this is your pics mentioned above. .
    Hello,

    I dont think these charts are in line with the set up on first article as They're conflicting with your initial article illuions

    paul

  9. #9
    Would you elaborate, if I have missed something then I apologise. There are some distinct time frames.

  10. #10
    Quote Originally Posted by ;
    Hi Ronald,

    The cross of the MAs would be my preferred option but I do know of some traders who do not apply this rule.
    I'm asking whether or not Step 3 has to happen just after step 1

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