timsk
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Hi Simon,. . . but manage risk always!
Welcome to T2W.
I like the easy to follow logic of the 'lessons' you've presented thus far and, broadly speaking, they reflect my own approach to trading the markets. I watched the video you posted and enjoyed it, but I have some issues in trying to square the stochastic/fractal coin that is the markets with Gartley butterfly patterns and such like. To my way of thinking (which I accept is different from yours), this equates to imposing what I want to see and looking for things that probably aren't really there. But, that's probably just me - each to their own.
Be that as it may, the ideas outlined in this thread and illustrated in your last two posts are much more my cup of tea. That said, the part of your post I've quoted does, as ever, go to the heart of the problem. Regardless of the methodology employed (does it really matter?), risk management is key. And the particular problem with the approach you outline - and I try to implement - is where does one place one's stop loss - assuming that is a stop loss is to be used at all? If going short, one could place a stop loss above the upper band. The problem of course is that one will be stopped out at the best possible point of short entry. So, what to do? Well, the trader could put the stop at 2 x standard deviation (assuming the bands are, say, at 1 x deviation) but, by this time, one is likely to be lagging the market to such an extent that a reversal has taken place. Anyway, hopefully, in future 'lessons', you'll address the issue of where you regard is the best area to place one's stops and to manage one's risk on each trade.
Tim.