Monday 1 June 2009

The Ms on FTSE RSI Monday afternoon (01/06/2009)

It was just a matter of waiting until the initial reward (as defined by the Bollinger Bands) was worth the risk, given the high level of probability of success.

The first tradeable M appeared on the 10 min IMO, but this is below my 15 min guideline. I have swapped the size of the Price & RSI windows to show what I mean by "chunky" candles on Price - alternating colours, lovely.....



The next one appeared on the 14 min, after the 10 min one was put under pressure but survived.



I traded the survival of the 10 min one and anticipated the formation of the 14 min one by going in at B/E 4510.

At this level the risk was small and the middle Bollinger Band was about twice the distance away (guideline is twice and this crept in).

What I really liked was the double break up and back down through the Upper Bollinger Band - the extra one is not needed for membership of Group A but is a real bonus.

I am going to re-think my groupings, maybe RSI above 75 or less than 25 should be A*, likewise the double moves on Price/Bollinger should also be A*!

If you were prepared to wait longer then the following ones on 22 min and 28 min had their good points.

The 22 min one was a faller on RSI, slightly so BUT it past the filter.



The 28 min one was also a borderline pass on one of the filters. Pt3 on RSI was only just 1 above the Pt2 BUT it past the filter - a measure of internal strength of the shape.






From then on it's personal choice as to how to trade it. I split the trade into halves, took 20 with half and moved the S/L on the other to B/E. The latter one JUST survived the first Stop hunting retracement - we always forget the ones that do!

cheers theory
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2 comments:

  1. Zacchaeus1 June 2009 at 21:01

    Thanks for these Theory

    Could you post an example of a good shape nullified by a doji? I thought the 22 min example came close but I am probably looking for the wrong thing.

    Appreciate your hard work

    Zac

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  2. theoryman1 June 2009 at 22:57

    Zac,
    I'd put the images of the 22 min & 28 min in the wrong order in the original post, I've now changed them around.

    It's the 28 min one that has the "almost doji" candle internal to the shape on Price, which is why the RSI shape is on the borderline with a change of just 1 between the two key points.

    "Almost doji" is a comparative term, it's when one of the candles has a relatively small body when compared the others on Price - I'll look for some tomorrow.

    cheers theory

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