Its a bit difficult to explain but what I look for on the 4hr is a contraction of price over a few candles where its just kept really tight. I drew it on my charts in the colour coded rectangles with the colour coded circles which indicate where i would enter. So obviously you have to trade with the trend so BTC is going up so with most of these Im looking for long positions. So i use these contraction zones to find a middle ground which the blue horizontal lines are and that is my desired entry point. So if price doesn't hit this line after falling above/below it then i don't enter.
So i use this as a big indicator to enter a trade along with obvious other indicators such as bullish engulfings nice hammers/wicks that are working in my favour. I have found that on almost every occassion price will fake in a certain direction before retesting our contraction zone. Price usually then tends to break the contraction zone before retesting it which is where I look to enter.
You can see on the charts im just going for a 3:1 rrr but in some instances i can just use that as a take profit and then keep riding it until i see some bearish indicators.
I feel like this style really limits my risk as well because when price is pushing to my entry area it usually tends to keep pumping up.
It is really important to be really patient with it and not rush into it the first time price touches the horizontal level but instead wait for it to produce a couple more bullish signs and even push past the horizontal line and wait for it to wick back down to it.
So i use this as a big indicator to enter a trade along with obvious other indicators such as bullish engulfings nice hammers/wicks that are working in my favour. I have found that on almost every occassion price will fake in a certain direction before retesting our contraction zone. Price usually then tends to break the contraction zone before retesting it which is where I look to enter.
You can see on the charts im just going for a 3:1 rrr but in some instances i can just use that as a take profit and then keep riding it until i see some bearish indicators.
I feel like this style really limits my risk as well because when price is pushing to my entry area it usually tends to keep pumping up.
It is really important to be really patient with it and not rush into it the first time price touches the horizontal level but instead wait for it to produce a couple more bullish signs and even push past the horizontal line and wait for it to wick back down to it.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.