Bill Graves Veteran   Posts: 125 Joined: 11/25/2006 Location: Phoenix, Arizona  User Profile | You are perfectly clear. Sorry I was not! Kris wrote: The first bar after the one touching EMA(20) closes above the bar before the one touching the EMA(20) What you wrote is correct, Kris What we are looking for is the "trigger bar", which we define as the bar that either touches or penetrates the 20 EMA. We enter long with a buy stop on the first bar that takes out the high of the bar preceeding the trigger bar. The catch is that the trigger bar can change if, in the case of a long set up, a succeeding price bar takes out the low of first trigger bar. That bar with the new low becomes the new trigger bar, and we will enter long when the high of the bar preceeding that new trigger bar is taken out. Another way to look at it is that the most recent swing low bar is the trigger bar. Looking at the attached ONT chart, one sees that price first took out the 20EMA on 5/31. That was the first "trigger bar". Each day since then, we have had a new trigger bar, including today. So, we will place a new buy stop above the high of the 06/03/07 price bar. While the ADX qualifies this as a grail trade, price is not making its usual grail pattern where we start to see some support around the 20 EMA. This could still be a good trade. Price closed the 5/14 gap today plus an extra penny before moving up to close above the open. The 8 EMA is still 4 cents above the 20 EMA. We also have horizontal price support here plus FIB support on the weekly chart. So we will just have to see. But percentage wise, price has penetrated the 20 EMA much more than is usual for this setup. Rules are, of course, reversed for short trades. Kris, Linda does not put any time restrictions on this trade. Perhaps this is because I have seen the grail trade set itself up in multiple timeframes simultaneously; i.e., the 2, 5 & 15 minute charts with the 15 minute chart taking up to 10-12 bars to generate a trigger bar. So obviously there are going to be a lot of bars to complete on the 2 minute setup. I suppose common sense would have to prevail at some point. It would seem that what was initially a grail pattern would becme a box play if an extended range developed around the 20 EMA. This might be a good project for an NN or a GA to try various inactivity stops. Best regards, This post was edited to correct the entry rule! [Edited by Bill Graves on 6/6/2007 9:57 PM]  Attached file : Grail_20070605.png (34KB - 612 downloads) |
