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This is a textbook example of the Zero Line Reject - for my personal nuance, the ZLR requires at least 9 bars above or below the zero line, and I prefer entering the trade on a CCI hook between +50/-50 on the CCI (the "Sweetspot"). This range is indicated by the grey rectangle which starts at bar count 9 after the first green bar. As you can see, the indicator gave 15 bars before the hook on the CCI occurred at the blue arrow, perfectly on the ZL. The last event that I need to enter a ZLR trade is the turbo (6 period CCI) cross of the ZL or 14 CCI, whichever comes first. In this example, the entry is with momentum on the turbo (TCCI) cross of the ZL. [2/16/05] Even though this is my favorite futures trade, I always use a stop, and I am always prepared to take a loss. This method is not an exact science, so protect yourself with stops and be prepared for losses, even with the most perfect setup. Losses using this technique WILL HAPPEN, and you must factor this into your trading plan.
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Disclaimer:
THERE IS EQUAL OR GREATER POTENTIAL FOR LOSS WHILE USING THIS
STRATEGY. All information, graphs and depictions represented in
this site are OPINIONS and HYPOTHETICAL PERFORMANCE RESULTS and
should be recognized as such and are not solicitations or instructions
to execute orders. You shall be responsible for any decision to
purchase and/or sell any of the futures products depicted herein.
Although, the information herein demonstrates the potential for
profitable trades, the potential for loss is just as equal due
to unforeseen circumstances and changing market conditions. You
must also realize that the indicators and strategies may not work
in the future and can be used to your detriment. The amount of
profit demonstrated in my trades may be entirely different than
yours even if the trades were entered and exited at the same time.
Differences in commissions, fees, and internet connectivity can
drastically alter your performance in comparison to what is depicted
in the charts and could possibly result in a loss. |
