Ankit,
Not sure where you asked me about bracketing but will upload it here anyway.
Bar painted in pink is a narrow range 4 bar and also an Inside day. I typed some comments there.
Key is to be able to understand market volatility and adjust x and y values of numbers above the high and below the low of a narrow range bar. If they are too close to the high and low of the narrow range bar, then you will get whipsawed.......
So buy and sell stops must be wide enough to avoid whipsaws(well at least you can try to protect yourself) but it's not guarenteed. Generally speaking, if you do get whipsawed you must still keep taking the trade in the other direction.
Will explain. Say you placed a bracket order to buy and sell on stops....your buy order is hit and your sell stop becomes your protective stop now. As soon as your buy order is filled you go and double the number of contracts/units whatever(in this case you add to the sells the same number you purchased). So if market turns around and goes the other way you are still in it. If that happens majority of the cases it's worth it to do that way.
Personally I don't like whipsaws; I would rather wait an hour for the market to settle down......but imagine if you understand whether strength lies in support or resistance and come to the market with a strong understanding of the direction of the breakout after an NR7 day?
Hope this helps
Shreenath
Not sure where you asked me about bracketing but will upload it here anyway.
Bar painted in pink is a narrow range 4 bar and also an Inside day. I typed some comments there.
Key is to be able to understand market volatility and adjust x and y values of numbers above the high and below the low of a narrow range bar. If they are too close to the high and low of the narrow range bar, then you will get whipsawed.......
So buy and sell stops must be wide enough to avoid whipsaws(well at least you can try to protect yourself) but it's not guarenteed. Generally speaking, if you do get whipsawed you must still keep taking the trade in the other direction.
Will explain. Say you placed a bracket order to buy and sell on stops....your buy order is hit and your sell stop becomes your protective stop now. As soon as your buy order is filled you go and double the number of contracts/units whatever(in this case you add to the sells the same number you purchased). So if market turns around and goes the other way you are still in it. If that happens majority of the cases it's worth it to do that way.
Personally I don't like whipsaws; I would rather wait an hour for the market to settle down......but imagine if you understand whether strength lies in support or resistance and come to the market with a strong understanding of the direction of the breakout after an NR7 day?
Hope this helps
Shreenath