Trading Elephant Bars: When and How to Enter and Exit

Summary

Unlock the secrets to trading "elephant bars" with two key entry strategies: anticipation and confirmation. For an anticipation entry, wait 1 minute and 30 seconds into a two-minute bar before buying or selling, as odds are high it will close as an elephant bar. If you miss the initial entry, a confirmation entry involves buying one penny above the high of the elephant bar or selling one penny below its low on the next bar. This confirmation entry has no time restraint. For "tailbars," enter one penny above the high for a long trade or one penny below the low for a short trade. Stops should be placed just one penny below the low of a long elephant bar or one penny above the high of a short elephant bar. For tailbars, the stop is one penny below the low or one penny above the high, respectively. Mandatory additions to winning trades occur on the first color change, while a second color change is optional. This approach minimizes risk, ensuring that any losses are minor, like falling to one knee, rather than catastrophic.