This is the forex software simulator I am using; https://soft4fx.com/software/forex-simulator.php
Now that you understand Entry Rules and Pull Back Rules which are exactly the same let’s move onto the last part.
The Continuation Trade.
This is super easy to understand and the concept is from VP’s video called the MACD video. MANY traders don’t remember that video and aren’t even using the most VALUABLE information from it.
He explained EVERYTHING we need to know about choosing the right kind of indicator to use for continuation trades.
It is a zero line cross indicator and within that are two lines that cross. There are many indicators that do this, for example: TRIX, PPO, RVI, QQE, REX and many others.
So for me at the moment I am using REX as my exit indicator AND I am using that as my continuation indicator too.
So the rules for continuation as follows:
1.) Primary Indicator
2.) Secondary Indicator
3.) Exit Indicator & Continuation Indicator (REX)
4.) NO VOLUME INDICATOR
5.) WITHIN 1 ATR FROM BASELINE NOT APPLICABLE. OUTSIDE THE 1 ATR ZONE IS OK.
How did I come to using my exit indicator Rex as my continuation indicator?
Well, it’s exactly the type of indicator we are suppose to use for continuations but it is also my exit indicator.
From lots of trials, errors and reflections I don’t see how you can have a separate exit indicator or continuation indicator all together so I made them one.
This is because if your exit indicator told you to exit the first trade and now you are looking for continuations.
You click the next bar and your primary, secondary, and continuation are good to go. (In this hypothetical situation is not your exit indicator).
Say you are good to enter, that means you better have a quick reacting exit indicator because it will probably still be signaling exit from that last trade you just exited and you’ll have to exit immediately because it is still saying exit from the last trade.
Does this make sense? It is a ridiculous situation that I solved.
This is why I made the continuation indicator the same as the exit indicator. SO that way, the above situation never happens because the above situation is ridiculous.
Watch my video and I explain how the continuation indicator is put to work. If you need a refresher on the VP’s MACD video, go back and watch it.
Now, that you understand this concept you have a cut and dry method of trading with no questions left unanswered! – Dave