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Trendreversal

Double MA ChannelsSimple strategy using 2 Simple Moving Averages channels, Momentum and ADX with Directional Movement First Channel: 70, High 70, Low 70, Close Second Channel: 144, High 144, Low 144, Close Momentum: 34 ADX: 14, 20 To use this strategy please refer to link related to previous post. The SMA 144 channel is used to determine the strength of a trend. Kind of like Bollinger Bands, the 144 will move farther or closer to the 70 depending on the strength of the trend. It's goo to tell you if you have incoming consolidation.
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by RagingSniper
Bears vs. Bulls - ConsolidatingSimple Triple 70 MA with Momentum and ADX Bears and Bulls are struggling for the lead as we're seeing consolidation in EUR/USD. Be sure to check your work on this one as we could see a possible reversal in the near future. However, for now, make sure if you've taken a Long position earlier today to stay in and don't fall for consolidation until you have confirmation from multiple sources. We could see a reversal and go down OR we could see another upward impulse move giving you more profit. Be sure tho, to mark your Stop Losses to maximize your profits. Want to know more about the strategy? See the Linked Post
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by RagingSniper
Reversal or Continuation? Thoughts?Simple strategy using: Simple Moving Average: 70, High Simple Moving Average: 70, Low Simple Moving Average: 70, Close Momentum: 34, Close ADX w/ +DM & -DM: 14, Threshold 20 We use the Simple Moving Averages channel to determine if we have a Long or Short Signal. The Momentum indicator is used as a confirmation indicator to confirm if we have a trend starting We use the ADX indicator with both Positive and Negative Movement to determine both the Direction and the Strength of said trend. We also use it to confirm if the pair is Consolidating or not. Here are the Rules: Long entry: Closing Price must cross above High MA AND Momentum must be above 100% level You can also use the ADX to determine the strength of the trend and when you should be pulling your trades out. Long Exit: You should be pulling out if you see consolidation or whenever you feel confortable. This is mainly a personal preference. I personally prefer pulling out after about 50 pips and I'm seeing a lot of consolidation. Short Entry: Closing Price Must be Crossing under the Low MA AND Momentum must be falling below 100% level Short Exit: Refer to Long Exit. If you have any questions, comments or ideas on improvements, feel free to leave a comment or send me a PM.
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by RagingSniper
2
How divergence plays an important role in trend reversals.This is my very first time I am writing any idea about how I read the charts. So my first idea is going to be on Divergence and how it plays an important role in trend reversal. First thing first, trend never stays in one direction forever. Sometimes it moves up and sometimes it moves down but how do we know that in anytime of near future we are expecting a reversal. In the pic below, we can clearly see that on AUDUSD trend is massively down from arrow area and everyone is looking to sell this pair. And every time when this down trend pullbacks we get a better price to sell (as if we are getting a higher price to sell) but think for a minute, when everyone is looking to sell and waiting for a pullback to happen so they can join the massive downtrend who will be the buyer? And how long we can sell a currency? Obviously, it can't remain in one direction (sell in this case) forever. Now in the next picture notice one thing when the price starts to fall down we see a LL and LH and we start selling this AUDUSD pair then another LL and LH and another sell then another LL and LH and another sell. Now we all now that we are making a LL and LH so when market is making LL and LH who will be interested in buying? NO ONE... After first 4 big pushes down, notice one thing all trend pushes seem to be weaker than they were initially and pullbacks are coming in deep. When momentum starts to fade out that will be the first sign that market may REVERSE in near future. A healthy trend always have momentum and health in it. If momentum starts to fade out and trend starts to loose its health what happens that those trend pushes starts to become smaller and weaker and pullback starts to come in deep. This is when Macd comes in handy. In the next pic, you will see after being in a downtrend for so long when you get the first sign of trend is now loosing its power (momentum and health) how you can use macd to confirm. This pic shows that when we were making LL and LH, on Macd we were also getting the same thing, but at the very right bottom of the pic we can see that we had LL and LH but on macd, story was totally different, we had HH and HL so this is the 2nd sign of possible trend reversal and this is time when Macd comes in handy on finding the reversal with divergence. So, in order to confirm we just have to go 1 time frame lower which is 4h in this case to see either we have a HH and HL on 1 smaller tf or not. We can see in above pic after ranging for quite long on 4h we finally had a HH and HL and then the buyers started to kick in. After divergence, buyers came in hot.
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by ajwadsaleem
Price Action Lesson 4: Weak hammerWeak hammer: For having successful and steady transactions, Simple detection of market patterns is not enough. But with a deeper look, we should calculate the success possibility of each pattern. One of the determining power Parameters of hammer stick is about Descending or ascending that the body can be. Thus, if the body of hammer is ascending, Possibility of starting an ascendant wave is very high. The opening price of the day, is very important. This price - is the previous day's closing price, in fact it is the price that they had a war at in previous day where buyers and sellers come to equilibrium. So on the day that the Hammer is forming. If buyers can raise prices to the point of closing price of yesterday, and by the end of the day, they keep the price at the top of it, they will be the winners of the war. If we can raise the price above yesterday's closing price, they are not conclusive winners of today’s war, and this war will continue for the next few days. Thus, if the body of hammer is ascending, Possibility of the beginning Ascending wave is very high. But if the body of hammer is Descending, Possibility of the beginning Ascending wave is less. In this case, it is said a weak hammer has made. - The picture shows a hammer candlestick with descending body. . As what can be seen, candle’s height is tall, but it has very short body height. Also Lower Shadow is long, and the upper shadow is very short. . As regards the Closing Price of market is under its Opening Price, therefore the body of this hammer is Descending, and the power is very low. Possibility of the beginning ascending wave is less.
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by ForecastCity
14
Price Action Lesson 3: Hammer, The first sign of beginning ...Hammer, The first sign of the beginning Ascending wave: Hammer shows that the war between buyers and sellers, at the beginning of the day sellers could create significant reduction in price, with their high investments. But when the price had come to the lowest extent of it, many of buyers have entered with more investments than sellers. And again they could increase the price close to what it was at the beginning of the day or may even more. And at the war that was between buyers and sellers, the buyers have been the winners of the day, and the market is largely in control of them. Thus, the possibility of further price increases in the coming days is enormous. example: picture Shows, currency pair of EUR/USD -0.31% in a 30 minutes time frame. At the beginning, by increasing investments of sellers, the price became to 1.16886 But in this range with the arrival of large buyers to the market and overcome to turnover of shopping on sales transactions, the price increased again. Sellers could increase the selling price due to the amount of demand from buyers. The starting price is may be at 1.17495 but it increased by the end of the day to 1.17578. As what can be seen, after forming Hammer , an Ascending wave started and the Price have increased more.
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by ForecastCity
22
Price Action Lesson 2: Conditions of a Perfect Hammer Conditions of a Perfect Hammer: . Body height must be short. . The total height of the candle must be taller than the Daily ATR-264. The taller the candle is, the stronger the Hammer is. . The lower shadow’s length should be very tall. It is better to be over 75 percent of the Daily ATR-264. . The upper shadow does not exist, or if it does, it is very small. It shouldn't be more than 25 percent of the Daily ATR-264. . The hammer that has an ascending body is stronger than the one which has a descending body.
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by ForecastCity
13
Hammer Candlestick Pattern DefinitionHammer Candle Stick Definition If there was a large drop in price in the middle of the day, but before the day ended it increased to what it was at the beginning of the day and even more, a significant upward return occurred. The candlestick of this change (move) will be a Hammer in a daily time frame. A Hammer formation on the daily time frame is a very strong indication for probability of increasing price in next days. Example: The picture shows currency pair of EUR/USD in a 30 minute time frame. On Ausust 09, 2017 the price significantly decreased from 1.17495 to 1.16886 or even lower. But after that, it increased rapidly at the end of the day to 1.17578 and then closed. Also in this picture - for better understanding - the Hammer Candlestick in the daily time frame - in the result of changes in a day - is drawn.
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by ForecastCity
8