An oppertunistic shake-out
Updated
Since I've posted the previous chart (on 1th of may) we can see the TTM squeeze hasn't completed yet (marked in upper chart with yellow circles).
But in my previous post, I've also explained how I use this DMI indicator to
The focus on strength 40 wasn't the right way to look at it. All the pumping happening at the time got to me, making me grow impatience. Because since I've posted that chart, these pushes became more dominant. And now we have had two consecutive bearish pushes. This can be described in two ways.
The first explanation (oppertunistic shakeout, my prospect. Previous analysis still applies):
When the trend is stale in both directions, it doesn't take a lot of force to move the price significantly. What this means is (I try to explain in layman's terms) less bears are necessary when the bulls are absent and vice-versa. The price shift is caused by opportunistic trades and do not have a fundamental catalyst. This does not cause a change in prospects but is psychologically torturing traders with long positions.
The second explanation, the reversal engages and a trend down is set. This is a premature conclusion and the chart is misinterpreted. I like to point out, misinterpreted. Not a false signal . It is extremely hard to predict a reversal (means charting before a reliable confirmation signal has happened). The DMI can be used for these things if used accordingly. We have 3 points in our chart that tell us we can't predict a reversal 'reliable'.
1. If we were to chart a new trend, this can only happen after the current trend halts.
- An example of a flaky trend stop signal would be on 23rd-24th april.
- An example of a clear trend stop signal would be on the 20th of march
No trend halts abrupt, nor is the halt always very clear. But we can see pretty obvious that the combined trend hasn't dropped below 20 since the 1th of may.
It has come close to 20, but didn't drop below it. And even if it did, it would take an additional bar (longer silence = more reliable) for an acceptable trend stop according to my own methods.
2. Both bearish pushes had less strength than past bullish push
3. The second bearish push was weaker than the first one, while the last bullish push was stronger than the bullish push before that.
If you enjoyed reading this please leave a comment. If you have any questions, please DM me. I can imagine you have questions, i am happy to answer them personally.
As I am a small analyst with few followers, comments actually give me huge dopamine rushes.
But in my previous post, I've also explained how I use this DMI indicator to
- signal the start of a new trend.
- measure the fading trendline untill its end.
- track the intermediate bearish pushes up till strength 40
The focus on strength 40 wasn't the right way to look at it. All the pumping happening at the time got to me, making me grow impatience. Because since I've posted that chart, these pushes became more dominant. And now we have had two consecutive bearish pushes. This can be described in two ways.
The first explanation (oppertunistic shakeout, my prospect. Previous analysis still applies):
When the trend is stale in both directions, it doesn't take a lot of force to move the price significantly. What this means is (I try to explain in layman's terms) less bears are necessary when the bulls are absent and vice-versa. The price shift is caused by opportunistic trades and do not have a fundamental catalyst. This does not cause a change in prospects but is psychologically torturing traders with long positions.
The second explanation, the reversal engages and a trend down is set. This is a premature conclusion and the chart is misinterpreted. I like to point out, misinterpreted. Not a false signal . It is extremely hard to predict a reversal (means charting before a reliable confirmation signal has happened). The DMI can be used for these things if used accordingly. We have 3 points in our chart that tell us we can't predict a reversal 'reliable'.
1. If we were to chart a new trend, this can only happen after the current trend halts.
- An example of a flaky trend stop signal would be on 23rd-24th april.
- An example of a clear trend stop signal would be on the 20th of march
No trend halts abrupt, nor is the halt always very clear. But we can see pretty obvious that the combined trend hasn't dropped below 20 since the 1th of may.
It has come close to 20, but didn't drop below it. And even if it did, it would take an additional bar (longer silence = more reliable) for an acceptable trend stop according to my own methods.
2. Both bearish pushes had less strength than past bullish push
3. The second bearish push was weaker than the first one, while the last bullish push was stronger than the bullish push before that.
If you enjoyed reading this please leave a comment. If you have any questions, please DM me. I can imagine you have questions, i am happy to answer them personally.
As I am a small analyst with few followers, comments actually give me huge dopamine rushes.
Note
By backtesting and writing a few bots I developed my own way of looking at the market. I'm trying to share this in bits of useful information to show how some bots combine indicators to make decisions once a setup has been formed. I've used to drop some charts here in the past, based on entry indications which don't require any interpretation. As every bot has a start signal, on which it starts parsing the market for further analysis. I came to the conclusion only posting start signals isn't value posting for traders on tradingview so I try to create more in-depth material whenever i have the time. I hope this makes some sense to few of you.
Related publications
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.