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    Guppy CBL

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    Longwave
    This document discusses the rules and objectives for using a 3-day count back line (CBL) for entering and exiting trades. The CBL entry rules aim to enter early in an uptrend, allow adding to positions, set initial stop losses, and establish entry targets. The CBL exit rules use a trailing stop loss to lock in profits while giving the share room to move within the uptrend. Exits occur when the share closes below the 3-day CBL or a downtrend line for confirmation of a trend change. The CBL is meant to be used in combination with other indicators like trend lines and GMMA to time entries and exits.

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    Guppy CBL

    Uploaded by

    Longwave
    835 views14 pages
    This document discusses the rules and objectives for using a 3-day count back line (CBL) for entering and exiting trades. The CBL entry rules aim to enter early in an uptrend, allow adding to positions, set initial stop losses, and establish entry targets. The CBL exit rules use a trailing stop loss to lock in profits while giving the share room to move within the uptrend. Exits occur when the share closes below the 3-day CBL or a downtrend line for confirmation of a trend change. The CBL is meant to be used in combination with other indicators like trend lines and GMMA to time entries and exits.

    Original Title

    Guppy-CBL[1]

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    This document discusses the rules and objectives for using a 3-day count back line (CBL) for entering and exiting trades. The CBL entry rules aim to enter early in an uptrend, allow adding to positions, set initial stop losses, and establish entry targets. The CBL exit rules use a trailing stop loss to lock in profits while giving the share room to move within the uptrend. Exits occur when the share closes below the 3-day CBL or a downtrend line for confirmation of a trend change. The CBL is meant to be used in combination with other indicators like trend lines and GMMA to time entries and exits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    835 views14 pages

    Guppy CBL

    Uploaded by

    Longwave
    This document discusses the rules and objectives for using a 3-day count back line (CBL) for entering and exiting trades. The CBL entry rules aim to enter early in an uptrend, allow adding to positions, set initial stop losses, and establish entry targets. The CBL exit rules use a trailing stop loss to lock in profits while giving the share room to move within the uptrend. Exits occur when the share closes below the 3-day CBL or a downtrend line for confirmation of a trend change. The CBL is meant to be used in combination with other indicators like trend lines and GMMA to time entries and exits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 14

    Trend Trading

    a high probability approach


    The 3 day Count back line
    Module 4
    The objectives for a Count back line Entry

    ¾ To enter early in the start of an uptrend


    ¾ To allow pyramiding
    ¾ To establish entry target
    ¾ To set an initial stop loss
    ¾ To set a maximum ‘no chase’ entry price
    Count Back Line ENTRY Rules

    ¾ Use latest Pivot point low as start point


    ¾ Ignore lower highs as you count back
    ¾ Draw entry line @ 3 highs up
    ¾ Include high of start point and gaps
    ¾ Enter day after closes above 3 day CBL
    Count Back Line ENTRY Rules Continued

    ¾ Best results: above downtrend line


    ¾ No chasing above no chase line
    ¾ Set stop loss: 3 day Count back from recent
    peak after pivot low
    ¾ Parcel sizing based on stop loss: max 2%
    portfolio risk
    Downtrend line
    No Chase Line

    3-Day Countback line

    p
    o
    n
    Objectives of a Count Back Line EXIT

    ¾ To lock in profits with a trailing stop loss


    ¾ To allow room for the share to move
    ¾ To exit close to the top of an uptrend
    Count Back Line EXIT Rules

    ¾ Use latest peak high as start point


    ¾ Ignore higher lows as you count back
    ¾ Draw CBL stop loss line @ 3 lows down
    ¾ Include low of start point and gaps
    ¾ Ratchet up CBL as share reaches higher
    peaks
    Count Back Line EXIT Rules Continued

    ¾ If 2 peaks at same price, use the one that


    gives highest CBL
    ¾ Exit day after closes below 3 day CBL
    ¾ Beware of selling near trend line support
    ¾ But definite exit confirmation if closes
    below trend line and 3 day CBL
    q
    p
    o

    n q 9.17
    p 9.10
    Exit 1
    o 8.90
    Exit 2

    n 8.59
    “ I usually stress that this is not a stand alone tool, ie

    z I apply it after a trend line break and after a GMMA confirmation.

    z I use it as a stop loss in a long trend after a trend line break and
    after the GMMA indicates the break is for real.”

    Daryl Guppy 21 July 03

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