HOW TO RIDE TRENDSThis educational idea refers to the last trading idea I published (linked below) and to many more I traded in the past.
The chart above shows the BTCUSD going from about 6'500 at the beginning of April up to around 10'000 in early May and all the way back down to about 6'500 in mid-June.
This idea shows how it was possible to ride the trend all the way up (4 buy opportunities) and all the way down (4 sell opportunities) with three indicators: the Breakout Pivotal Bars , the Sentiment Index and the Levels and Zones .
Here's how they work to identify setups:
Breakout Pivotal Bars
• For break-ups the candle must be coloured in green.
• For break-downs the candle must be coloured in red.
• Blue candles mean indecision so either trend continuation or imminent trend reversal. Depending on your strategy it is possible to trade them or not.
Sentiment Index
Possible situations are:
• Breakout (e.g. Bullish Sentiment in case 1 or Bearish Sentiment in case 8)
• Divergence with the price (Bullish Sentiment in case 8)
Levels and Zones
Gives a reference in real-time to where the most significant levels and their corresponding long/short zones are.
Let's see the 8 trading opportunities:
1. Break-up of consolidation (blue candle) + Break-up of Bullish Sentiment + Above Support -> GOOD OPPORTUNITY
2. Break-up of consolidation (green candle) + Break-up of Bullish Sentiment + Above Support -> GOOD OPPORTUNITY
3. Break-up of consolidation (blue candle) + Break-up of Bullish Sentiment + No Support nearby -> VALID OPPORTUNITY but pay attention
4. Break-up of consolidation (green candle) + Break-up of Bullish Sentiment + Resistance Above -> VALID OPPORTUNITY but pay attention
5. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment (divergence in Bullish Sentiment) + Below Resistance -> GOOD OPPORTUNITY
6. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is pretty far! -> GOOD OPPORTUNITY
7. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is pretty far! -> GOOD OPPORTUNITY
8. Break-down of consolidation (red candle) + Break-down of Bearish Sentiment + Support is still pretty far! -> GOOD OPPORTUNITY
