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Bollinger Band and T-Line TimingHere is a method to track current trends and spot reversals. This technique combines two separate indicators, the Bollinger Bands (BB) and the T-Line . Bollinger Bands contain three parts. First is a 20-period simple moving average, the middle band ( purple line ). Second is the upper band and third is the lower band ( blue lines ). Both of the upper and lower bands are two standard deviations away from the middle band. This sets up a powerful and visual summary of historical volatility. Thus, price is unlikely to trade above the upper band or below the lower band. When price does move outside of these ranges, it retreats back into range very quickly. So, Bollinger Bands are a great “probability matrix” to time and control both entry and exit. Rick Saddler coined the term “ T-Line ”. The T-Line ( red line ) is an 8-day exponential moving average of price that yields surprisingly reliable signals for changes in price direction. The general rule is that when price is above the T-Line, it remains bullish until it crosses below and closes for at least two sessions. This sets up a bearish reversal. When price is below the T-Line, the prevailing bearish trend continues until price crosses above and closes above for at least two consecutive sessions. Taken apart, Bollinger Bands and the T-Line are powerful on their own. However, when used in combination, you set up a dynamic trading range, making it easy to spot when a trend begins and ends. As price advances, the BB upper band represents resistance and the T-Line is support. When prices are moving lower, the T-Line is resistance and the BB lower band is support. The chart for the S&P 500 (SPX) demonstrates the trend and exit signals this combination provides. The first crossover in early February was bullish, marked by the move of price above the T-Line. Price moved up over 45 points to the high before the crossover reversal. In late February, price was trending lower with considerable strength and many gaps. The retracements occurring in the second week could have been viewed as reversals, except for one important signal: Close price remained below the T-Line from February 24th entry at 3226 all the way down to End-March when it traded at a low of 2192. Price did close above the T-Line toward the beginning of March, but immediately crossed back and closed below the T-Line the next day. Since price did not close above the T-Line resistance for two consecutive sessions, this bearish trend continued. This was further supported by the BB lower band, marking dynamic support. On February 27th, price broke the Bollinger Band Support and created a Bollinger Band Snap. This could be used as an exit, since price had moved down almost 250 points from the open, resulting in a profit, and price is unlikely to stay trading below the lower Bollinger Band for long. If one exited based on the strong Bollinger Band Snap on February 27th, a re-entry can be taken on March 6th, with a confirmed close price below the T-Line at the 2973 price level and continuing down to about $2192. How would you know when this bearish trend would end? Resistance was marked by the T-Line and support by the lower Bollinger Band. This did not end until March 25th when price closed above the T-Line for the second session in a row, indicating an end to the bearish trend, and a total move of over 750 points. The third crossover took price back into bullish territory, this time marking the end to a four-week bearish trend and the start of a new bullish move. Price crossed above and closed for two consecutive sessions on March 25th. The S&P 500 moved up over 150 points, before it reversed and closed below the T-Line on April 1st. However, even though most of the price activity took place below the T-Line on April 2nd, it did not close below the T-Line. This type of price activity may warrant a protective stop since the close of the bar was just barely above the T-Line. Price moved back above the T-Line and continued its move higher with another one day close below the T-Line on April 21st. When did the actual trend exit appear? May 4th, when price closed below the T-Line for the second session in a row. This combined Bollinger Band and T-Line dynamic trend tracking is reliable and it can be used effectively in many ways. First, as shown at the beginning of the chart, it shows a long entry and provides profit opportunity as the index rises. Second, a crossover, with a confirmed second session close, is the exit point for leaving a current trend, taking profits, or for entering a new trend based on the newly revised price direction. Third, as shown in the February 24th trend, using a Bollinger Band Snap to signal a time to take profits and exit the position as price generally will retrace back inside the Bollinger Bands. Fourth, using a desired profit target based on historical research on the selected underlying and exiting once that profit target is reached. This solves the most disturbing aspect of short-term options trading. When do you exit a trade? Even with the lack of price-specific reversal signals, the combined use of the Bollinger Bands and the T-Line are a powerful and reliable system to improve timing.
SP:SPXEducation
by NewCycleTrading
39
How to filter out the noiseIn this post I will demonstrate one of the techniques that you may use to filter unnecessary noise from the chart. For that purpose we will use Three Line Break charting (invented in Japan) along with a Japanese trend indicator Ichimoku Kinko Hyo. Line break charts were developed in Japan and popularized here by Jewish American author Steve Nison (the man who revolutionized technical analysis by introducing Japanese candlestick charting techniques to Western traders) in his book "Beyond Candlesticks" (2009). In that book, Steve Nison unveils the mysteries of four more of Japan's most closely guarded financial secrets - Kagi, Renko and Three-Line Break charts. Three Line Break charts show a series of vertical green and red lines (bars); the green lines (bars) represent rising prices, while the red lines (bars) portray falling prices. Prices continue in the same direction until a reversal is warranted. A reversal occurs when the closing price exceeds the high or low of the prior two lines (bars). The green and red bars on the price chart are called “lines”. Second, line (bars) changes are based on closing prices, not the high-low range. Third, Three Line Break charts evolve based on price, not time. Each new closing price produces three possibilities: 1 A new line of the same color is drawn when the price extends in the same direction. 2 A new line in the opposite color is drawn when the price change is enough to warrant a reversal. 3 No new lines are added when price does not extend the trend or the change is not enough to warrant a reversal. Good luck! Roman IC Finance
Education
by ICFX
1
Bitcoin and Altcoins battle for marketshareOn the left, we have the Altcoin market cap vs the Bitcoin dominance chart on the right. We are looking at a possible reversal with the alts as we approach the 77 Billion dollar mark and Bitcoin's drop to 62.72 dominance. As we get closer to the Bitcoin halving I believe we could see Bitcoin bounce from this fib line at 62 and trend higher as bigger money starts to accumulate more Bitcoin. Once we move higher to the 68 level in Bitcoin dominance then we will top out with Bitcoin and head lower to the 57 mark. At this point, Altcoins will have hit their low at the next fib line of $50 billion and head higher and from this point, I believe Altcoins will not look back as Bitcoin slowly gives market share to its cousins and nephews in the Alts.
CRYPTOCAP:TOTAL2Long
by altcoinb
ABBV - Letting it Come in for a Better EntryOne of my absolute favorite stocks for the next 3 years: ABBV. I'm letting it come down a bit before initiating a position. My model says that there is going to be heavy buying between 74 and 79 which is where I will start accumulation. If you found this to be insightful or helpful, please show appreciation by hitting that like button. If you want more ideas I invite you to follow as well! I try to be here for all of my followers with any questions they might have. Feel free to shoot me a DM or comment below to start a conversation!
NYSE:ABBVLong
by chartsareforships
1
Coffee has taken a dive, now looks ready to rally againPost the sugar-rush of speculative buyers, the commodity sold off heavily, gapping through a short term uptrend-line. Now the commodity, represented by the ETF JO, looks to be stabilizing at the 38.2% Fibonacci level from the Dec 13 high. Moreover, we see a cluster of moving averages, including the 200day Exponential Moving Average at this level. Given the current risk-on, and dollar-down environment, coffee should be supported moving forward. This sell-off is overdone, and other soft commods such as Cocoa and Sugar have performed splendidly in recent weeks. There is no reason for Coffee not to do the same. I am targeting new near term highs, and a 141% extension from the previous rally off the lows.
JLong
by MT-Macro
EURUSD short (Supply and Demand Anaylsis)Current State: We can see that the price already Retested the Supply Zone. Expectations: I expect the price to drop. The first possible target would be the Support Line. We could even see EURUSD moving more to the Down Side. So the Demand Zone marked on the charts could also be a nice Target. This is my Analysis on the EURUSD. I hope you enjoy it. Feel free to comment on the Analysis if you want to know something. Let me also know in the comments your view about the EURUSD .
Short
by DariusFxTrading