LOL. I go do some work and we have 50 posts on this thread.
I'm not Bob, but have put a ton of trades on this thing with real money and in the sim. To see what 500 trades looks like and where the gotchas are.
By the rules. EURNZD is good. We are below 240. RSI is pegged. It is reasonable to place pendings... but we may want to be patient.
The AO is a lagging MOFO. Ignore it for entries. Ignore it before you are in a profitable trade. Your stop is there for a reason. To give your trade room to breathe, not to be canned prematurely by a random green or red bar.
Use it for an overview of how strength is changing. Use it as confirmation. Use it for exits if you don't want to leave prematurely. It also occasionally shows divergence.
Bob's last quote on this.:
nanningbob wrote:Any way you have it right. You are not waiting for the AO to change colors to enter. You have set pending trades while price is going in the wrong direction or is ranging. When price breaks back into the trend it will trigger those trades and also make the AO change color. Your setting of the pending trades had nothing to do with the color of the AO but the RSI 2 or STO 5 being flattened and whether you are above or below the 240 line. Those are the two key reads back into the trend.
The AO only confirms the direction when you are already in the trade. The trade is triggered by your pending trade not the color of the AO.
The way I see it cmeade is dead on in his concerns about just chucking in the pendings. It may be rules based. But, a little discretion and patience may save some heartache. The RSI will twitch, the lower TF one may move a couple times before the 4Hr chart is ripe. The system will still win, but you will have more drawdown and therefore more chance at making a psyche error if you blindly trust.
Mike
Reading the dark heart.
