So far, i have tried explaining control bars and how to trade them using M5 charts and these are too fast for me to post and also very tedious...here i present 1H charts which r easier to understand...i have marked off the 2 recent control bars on 1H chart as A and B...
The idea to trade these is to wait and do nothing till the price is within the control bars...If there is a breakout, then go long or short with small SL of 30-40 pips and u can make 100s of pips.
Look at bar B...The next 3 -4 bars after that dont break above it and so you just wait. Then there is a breakout and retest of the high of bar B. You can either enter on the breakout or the retest. You can have SL of 30-40 pips and you would have got in at around 5880 and you have a trade for 300-400 pips. As i said, these bars are noticed as soon as they appear and i am not fixing data after the fact.
Now look at the most recent bar A. Again, a long on a breakout of this would have fetched you close to 200 pips. You are now having a retest of the bar. Would be interesting to see if it bounces up or whether it gets inside the bar A. If an hourly bar closes inside bar A, then the high of Bar A would be a good resistance. Shorts near the high of this bar (after break thru inside the bar) would be good for a move down to the low of this bar. Idea is to take off one half of your trade for 1:1 and leave the rest for 3:1 or 4:1 reward risk ratio...
