UK100 / FTSE100 a BULL at heart
Statistically Indices go up . . . pull backs and corrections should always be considered as potential BUYING opportunities. However . . . never look a gift horse in the mouth and if analysis dictates a confirmed SELL then SELL.
Here's my latest chart of the hourly which I updated yesterday. Beware static charts are relevant at the time of posting but continually evolve as new PRICE information comes in. What is plotted on the chart is a graphic representation of where things currently stand and what the possibilities are at that given time. PRICE never travels in a straight line so my graphics are symbolic only and will rarely, if ever play, out exactly as plotted.
EMAs on the Hourly :
Black = 10
RED = 20
BLUE = 100
Fuchsia - 200
The GREEN and ORANGE are the daily 100 and 200 EMAs . . . always good to keep an eye on them.
EMAs on the 15m
Black = 10
RED = 20
BLUE = 40
Fuchsia - 80
Overall picture . . . not too shabby.
Positives . . . a little pull back after attempting to hit 7500 . . . to be expected. 3 X SUPPORT levels all plotted below . . . look to the left and trade to the right. Support levels coincide with NPOC (Naked Previous OPEN/CLOSE) and FIB levels and at the time of writing PRICE is sitting on the first of these support levels and the EMA100 . . . as yet there is no signal to BUY and there is still a possibility that PRICE will recede further.
DUAL time frame trading uses the hourly chart for the PRIMARY trend for intraday trading and the 15 minute the MAJOR trend is used to pinpoint entries and exits.
Using just EMAs and replicating in an MACD may sound simplistic but dovetailing the information from both is a very accurate way of determining when to enter a high probability trade. The MACD differs in information by virtue of subtracting the longer EMA from the shorter EMA and then dividing a multiple base 9 EMA of the MACD to give the signal line. The histogram then plots the difference between the two. The histogram is very important and in the 60m chart shows GREEN when PRICE is generally positive on that specific setting and plotting RED when generally negative.
An example of using the 60m and 15m charts together . . . A RED box has been plotted where the 100/200/90 HIST shows RED on the hourly chart and the 10/20/9 MACD has crossed the Zero line . . . the RED box is then duplicated onto the 15m chart which has the 60m MACD plotted alongside the 15m MACD. Effectively there are now three different time frames all saying the same thing in unison so the probability of a successful SELL trade is high when the 15m MACD is also below ZERO line. Exiting the trade is arbitrary to the individual but in this instance I've just plotted it at the 15m MACD crossing up through the Signal line although this is not necessarily a perfect method as PRICE will often revert to the 10 or 20 EMA and then continue on it's original path . . . all I can say in this respect is practice makes perfect. NB. the trade is an example of the methodology . . . it wasn't taken as I was absent yesterday.
As I finish writing PRICE seems to be taking a little end of year jump from first SUPPORT . . . will it continue and SUPPORT hold next week, I have no idea. I'm signing off for the year so my best wishes for a great NYE and all the best in 2022.
TS
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