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Buy one and get one free.....
05-05-2011, 11:19 AM
Post: #1
Buy one and get one free.....
What seems like ages ago now, Steely and I were wondering whether it was better to wait for a second C4 level to be breached in order to confirm that the Pivot was in.

The benefit is that if the first one isn't one, at least the second one might be!

The downside is that by waiting, the distance to the Pivot is bigger and therefore so is the risk to the bank by using it as a Stop. Another problem is that the whole move might be just about over when it hits the second level.

Sometimes the consecutive C4s are that close together on Price that waiting for the second one to be breached costs very little but the extra "certainty" comes as a welcome benefit.

   

I have shown two alternatives in terms of deciding when to go Short.

The first, in dark blue, shows how the double breach is used and the Short is entered - as used by me on EURGBP today.

The second, in light blue, shows how it might be possible to get an entry with an even smaller risk to the bank. You get the double breach, then a retrace which contains some combination from the list of:-

has its own ending pattern,
> 61.8% retrace,
close encounter with the Pivot level.

cheers theory
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Buy one and get one free..... - theoryman - 05-05-2011 11:19 AM

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