{"url":"https://www.pagoolabs.com/posts/api/94/edit/","post":"Hi David,\r\nYou have a point with trade setup #3 winning. According to me, the TP would be 87.80 which the market easily hit 3 bars later (12 hrs). \r\n\r\nHowever there was only a single reversal bar in the pattern and if you take such a setup once then consistency requires you take them always. I have found they often lead to failed trades. \r\n\r\nTrade #4 is also a single bar reversal and #5 is a series of inside bars, not really a reversal.\r\n\r\nIn this case you would win but over time, taking all such patterns leads to problems.\r\n\r\nThe reason to open after a reversal is that there is a sense the market has tested a price level and rejected it, for now. A single bar back is little more than noise and does not give me confidence the market has rejected anything. But the true test is to simulate a large number of these setups with single bar reversals, or inside bar patterns, and see if their wins exceed their losses.","html":"
Hi David,
You have a point with trade setup #3 winning. According to me, the TP would be 87.80 which the market easily hit 3 bars later (12 hrs).
However there was only a single reversal bar in the pattern and if you take such a setup once then consistency requires you take them always. I have found they often lead to failed trades.
Trade #4 is also a single bar reversal and #5 is a series of inside bars, not really a reversal.
In this case you would win but over time, taking all such patterns leads to problems.
The reason to open after a reversal is that there is a sense the market has tested a price level and rejected it, for now. A single bar back is little more than noise and does not give me confidence the market has rejected anything. But the true test is to simulate a large number of these setups with single bar reversals, or inside bar patterns, and see if their wins exceed their losses.
","userprofile":"https://www.pagoolabs.com/userprofiles/api/SeanManefield/","submit_date":"2018-01-09T12:10:36Z","is_public":true,"previous_version":null,"edited_date":null,"upvotes":1,"downvotes":0,"replies":0,"parent":"https://www.pagoolabs.com/posts/api/93/","story":"https://www.pagoolabs.com/stories/api/58/","forum":null}