September 6, 2011
- in Uncategorized by schooloftrade
Price Channel Trading Strategy
Price Channels are drawn with the Trend Channel Tool in NinjaTrader 7.
Channels are very easy to trade using the directional bias of the channel.
Bull channel has higher highs and higher lows and you will buy pullbacks with new highs. Buy at support when price falls.
Remember, trying to buy the highs of a bull channel will always be difficult, especially if the market is slower, or low volume.
Bear Channel has lower highs and lower lows, and we want to sell retracements with new lowers, and sell at resistance when price rises.
Remember, trying to sell the lows of a bear channel will always be difficult, especially if the market is slower, or low volume.
The key to trading breakouts on a channel is to wait for the support below or the resistance overhead to be broken, and then look to buy a pullback with new higher highs and/or sell a retracements with new lower lows.
Which price channels are more important?
– The slower timeframe channels are more important than the faster timeframe channels.
Trade Management for a price channel: buy the lows, take some profit early, and then your runner is at the highs.
Wider channels will have wider targets, and narrow channels will have smaller profit targets.
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Do we trade the GRAINS/AGS? Corn (ZC), Wheat (ZW), and Soybeans (ZS)
– They have relatively high margins
– The window of opportunity is small (1030-215)
– They will periods of VERY whippy price action
– Crop reports in addition to the economic news must be analyzed. (USDA Crop Reports)
– For those reasons I don’t recommend a new trader uses them.
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Trailing Stops:
– Your initial stop is ‘trailed’ to lock in profit as the trade goes in your direction.
– Automated trailing stops are very hard to use.
– Auto trails don’t have intelligence
o Watch speed
o Can’t use dynamic levels of support and resistance
– Manually trail my stop by using the market support and resistance
– I do use a breakeven stop that moves my stop to the point of entry when we get 10 ticks on the trade.
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Charts Jamming?
– tips for best cpu performance
– tips for your charts running faster
– You may also want to download the newest version of NT7
– Also download the newest version of the POT Template for the Euro.
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1 contract ATM strategy:
If you have fixed stops and targets (10/10) than its easy
– 10 tick stop
– 10 tick target
– No trail
– No trade management
If your stops and targets are different for every trade you take (within your risk tolerance)
– 40 tick stop
– 40 tick target
– No trail
– When i enter the trade, I will always know WHERE my stops/targets will be, and then i manually move them into place.
