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Post# 259 Dec 30, 2012 9:24am
Okay finally the PRZ. LOL
Now that we have identified where the potential PRZ is, what do we do when and if price gets there? What are we looking for that would give us the signal to engage? Well the simple truth is that it really is up to you and what you are comfortable with. What reversal signal do you feel comfortablewith 1,2,3 patterns, engulfing, pins, hammers, price rejections? All these arefine and what works for one may not work for others but I will tell you how I handle this magical zone.
Before I do this let’s talk about pricing. As traders I hope you would always be looking to buy or sell at the best possible price. This best price it as close to a top or a bottom as possible. I use the term buying or selling at wholesale. The majority of traders out there are retail traders this group of traders are the breakout traders and indicator traders. Their signals get them into a trade later and at a less favorable price. This is the type of trading you want to get away from. My method always gets you in at wholesale prices and will offer you the best risk reward possible. Enough said, if I need to explain this point further let me know.
Taking the trade at the pattern completion point blindly on a limit order is still a high probability trade. We are talking these patterns depending on the one and identified properly offesr a 70 – 80% success rate tested and true but I like to have a stronger case for entry if possible. So I employ other elements and apply them to my PRZ to zero in on that elusive top or bottom. I have discussed these already and don’t feel the need to explain them again unless needed. This combination of element orconfluence usually gets me in within 20 pips of a top or bottom and most of the time it’s even better as you have seen.
Next post I will drill down further.
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