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Squat Bars: A Methodology to Identify Short Term Reversals

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by Paolo Pezzutti -  May 1, 2006
6.7 (from 15 ratings)

Applying this method you will see that it will provide you with small wins and sometimes small losses, but your profits will be based on a few big wins. The advantage is is that risk is strictly controlled because the stop loss is easily identified, since the beginning of the trade.  I believe it cannot be applied fully automatically but a form of supervision is needed.

Figure 1: Emini S&P Daily chart. A long trade setup.

Figure 2: Emini 1-minute chart.  A short trade setup.

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Recent Comments:
The problem with MFI and all indicators other than maybe the simple moving average is the tendency to allow them to mask what is really happening and to assign a greater significance to the values and lines than actually exists in reality. What is it you are not going to bother to look at if you use MFI? You are not going to be looking at where the open and close are situated relative to each on the range. Are they far apart or close together? Are they biased more toward the top or the...
Danger Field   18-05-2006 09:06:03
Thanks for producing this article, I always enjoy reading about ideas that are new to me. I think I understand what you mean. Since one of the defining components of a squat bar is it's volume, I'd like to see the volume printed on the chart as well. JO
JumpOff   17-05-2006 22:54:57

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