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Posted 05 June 2018 - 08:17 AM
I'm going to mark some trades, it's just me changing the template. Bear with me.
Points to remember:
- OB/OS: They are from M2 chart and there are two obvious patterns here. Both of them starts with a regular divergence and value chart OB/OS state.
- Entry: When a regular divergence happens, price will be at peak moment at that time. We will wait for proper pullback or a failure. The failure is a bit more risky, but it can also mean there is a change in trend too.
- SR: When there are too many fractals/sr dots around same place, it's a sr zone, and price might react at such place really hard.
- Clear Trend: When making divergence, all of the price must be clearly above or below the EMA.
Now, let's discuss all of the pointed entries and how to find them. I'll be showing you same thing multiple times to explain properly.
I've been watching the chart for a while and it might just be beginners luck and may result in OTM, so stay alert.
- Price is going down and showed us VC alert. Then it paused/pulled back a bit, continued going down, while VC starts to go back up. Then price starts to go up but failed to go above the most recent high or even the EMA. When we see a string candle, we do a 2x PUT. Note that we couldn't entered 2-3 bars ago when there was a first red bar. But since we are so smart and we are backtesting, we will ignore that OTM entry for now.
- Price is going down, making lower lows, all while staying below EMA. It showed us a divergence, but then it starts going up up up and showed VC alert on opposite direction. Not only that, it also broke past the EMA and closed above last swing high. We can do a 2x CALL, right?
- Price is clearly above EMA right now, it's making higher highs, while VC is going lower. We see it slowed down a bit and then made a bullish candle that's around as big as the previous few candles, we do a CALL.
- Price is just going down from a resistance zone above around 1.12900, it went below EMA and then started making lower lows, but VC is making higher highs. Suddenly within short movement, VC made a OB alert, we stayed on alert and saw the next big red candle pushed away from EMA. we do a 2x PUT.
- Price broke a range above. Then continued going down, making lower lows staying below EMA. It made VC alerts continuously. and then pulled back and made lower low while VC made higher low. when we see it showing us a candle with small red body almost at OB zone, we PUT 2x.
- Price stayed below EMA, continued to make lower low with very short swings. On VC, it made higher low. We wait and see it showed us a VC alert on OB zone while getting stuck by EMA shortly. It made a nice red candle afterwards we make a PUT.
- This time price gave us another lower low and stayed below EMA still. VC alerted but made higher low. We wait for a nice red bearish candle which is almost at OB zone. We make a 2x PUT.
- Finally, we see another divergence, but this time price broke the EMA by a lot and also broke the previous swing by a bit. This was a risky trade since there are all those fractals making a resistance zone. We can only hope the candles ends up within the space. we do a 2x CALL.
When I say 2x, I mean 2xTF => 4m expiry. You can use 2.5x or 3x expiry but I'm not sure. It's all subjective.
You can also notice most are failed regular divergence, and only the newly created trends are normal divergence. I also did not mark hidden divergences, but you can see a lot of them too. The difference between normal divergence trade approach and this approach is that you are mostly making the trade 1 candle later after confirmation.
Here are some more that'll show that a doji that goes all the way up might eat away all of the movement, and it might be a small double top, which is a problematic pattern for a CALL.
1. Is it possible to mark each step you describe on the chart.
2. Can you explain the search for the entry point in more detail?
Posted 13 June 2018 - 10:10 AM
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