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Oscillators

My favorite indicatorsIndicators. They make us feel good, they comfort us, we love to expect too much from them then call them useless when they fail to predict the future. Or at least some people do. I myself find indicators comforting, or should I say they bring me relief. They can make every thing smoother, they throw numbers at us. The number is either above our threshold or below, the answer is binary. They give us certainty which is something we all crave in this seemingly random continuous dynamic flow of prices. I am going to start with the indicators I always use, and then present a few of my favorite ones and describe what they do and what I think of them. 1- Fibonacci Sometimes it gets called an indicator, sometimes it does not. Indicator or not there is not 1 buy or sell I do that does not involve a retracement, extension, or at least the measuring tool. I trust my eyes alot, but if I was to trust them to know if we are at 50%, more, or less, my judgements would be all over the place. The definition of a fib retracement that is given is a tool that allows analysts to find areas of support. It helps me see where we are and where to enter a trend. 23,6% and below is too early for me, 38,2% is often a nice one. Fib extensions let me see how far we really have gone, and helps with finding targets, or when to look for reversal. Depends on the context on various timeframes, this includes alot of things, depends my goals, and the pair or commodity. 2- Average True Range (ATR) I use this one all the time. This indicator measures how much the price has been moving in the past specified number of candles, including gaps. "It was created to allow traders to more accurately measure the daily volatility of an asset by using simple calculations." I want to know how volatile the market is to help find out how "active" the pair is and other things, and to help define stop loss, entry, target. If I am looking at a trend on the H4 and D1 timeframes and I want to ride it I will not want to buy a pullback of 1 H1 ATR. And target more than this too. It can also be used to note how expensive - in spreads - a pair is: if the spread is 20% of the daily ATR, it will be pretty hard to day trade it. Now, the ones I do not use often. a- Moving Averages Moving averages are indicators that go on the chart and show what the average price for a certain period & timeframe is over time. The smooth out noise, and provide indications to determine what the direction of the trend is. There are several types of moving averages: Simple, Exponential, Smoothed. I do not use them. First of all my eyes are trained to detect trends and find what I want to see in the price quickly. Second, I am interested in vertical moves, both for going with or against the trend, am I so picky that the price clearly is past MAS. Third, once I identified something I like I will do a full analysis of it, very detailled, precise, using MAS would be ridiculous. b- Relative Strength Index, MACD, and Stoch Ah one of scammy "vip educators laptop on the beach lifestyle" & novice investors favorite. Those momentum indicators show strength, with alot of lag, and poor precision, the MACD also has additional info I will not get into. Some bad unprofitable market participants use it for "oversold" readings, meaning they will consistently buy in downtrends. I look at them sometimes mainly because I think they look good. They look "professional", and they can be conforting, seeing divergence triggers the rewarding center. But I would not seriously incorporate them in my activities. c- The Commitment of Traders It is a report that shows the open interest of participants in the futures market. A simplified version such as in the example below can help make decisions to buy long or short contracts. While imperfect (a big hedger with a small speculative position has all counted as "commercial") and general, it can help with one's study of a commodity. For example, gold was over-shorted at the bottom in August 2018. d- Average Directional Movement (ADX) This indicator that was designed for commodity daily charts can be used for about everything, and it shows the strength of a trend. It does so by measuring the amount of price movement in a single direction. Wilder suggests that a strong trend is present when ADX is above 25 and no trend is present when below 20. I think it is better than the RSI or worse Stoch & MACD. In particular in the following example with the smoothed version (25 DI length), otherwise it can be all over the place. I see how it could be used with an alert (when value > 25) to warn an investor a trend might be happening. Also to help filter consolidations many want to avoid, if the eyes are not trained yet to a naked chart, or if the investor is not disciplined. e- STDEV & Implied Volatility Standard Deviation is a statistical calculation used to measure the variability. Implied volatility is a metric that captures the market's view of the likelihood of changes in a given security's price. The VIX is a market index that tries to project the expected volatility (downwards because that's all they care about) in the stock market. I do not care much about those values. ATR + Fib + Measuring tool etc are better. f- Bollinger Bands These bands envelop the price using a moving average (20SMA) and standard deviations away from it. "When the bands tighten during a period of low volatility, it raises the likelihood of a sharp price move in either direction." It is supposed to help visualise tight periods before a big move. And the price often stays between the bands (that's not very helpful). Sometimes when the price really gets tight with BB it really hits the eyes (Bitcoin), the small range and then the massively expanding one. I do not really see the use for it. Bollinger Band users blind much? I have no use for them but they sure look pretty. g- Volume for Stocks & Crypto Good luck using volume with Forex. Volume tells us how much activity has happened. Did the price go up with only a few buyers? Or were there a whole lot of them? Is a support strong: Many participants are watching it? Or only a few = not that strong. There is a whole lot you can deduce with volume, but it is not the holy grail either. I rarely use it because the Forex market is OTC and we do not have that data, and with futures, it is rarely that useful. h- On Balance Volume (OBV) OBV rises when volume on up down is bigger than volume on down days. Its creator thought that volume precedes price. It was designed to help detect bottoms with divergence, and spot smart money (big institutions) buying while dumb money (retail) was selling. I doubt it will make the dumb money (that all think they are this special wonderboy) outsmart the dumb money. Retail investors are likely to call bottoms every 2 weeks and chase bottoms and get giga rekt in the biggest bear market ever. Maybe a good idea to go short when there are bullish signals in the future? I can already picture greedy and overexcited "investors" chasing every single "signal" they see. There will be many pullbacks in the big downtrend.
Education
by MrRenev
1
Evolution of MACDMoving Average Convergence Divergence – MACD The most popular indicator used in technical analysis, the moving average convergence divergence (MACD), created by Gerald Appel. MACD is a trend-following momentum indicator, designed to reveal changes in the strength, direction, momentum, and duration of a trend in a financial instrument’s price Historical evolution of MACD, - Gerald Appel created the MACD line, - Thomas Aspray added the histogram feature to MACD - Giorgos E. Siligardos created a leader of MACD MACD employs two Moving Averages of varying lengths (which are lagging indicators) to identify trend direction and duration. Then, MACD takes the difference in values between those two Moving Averages (MACD Line) and an EMA of those Moving Averages (Signal Line) and plots that difference between the two lines as a histogram which oscillates above and below a center Zero Line. The histogram is used as a good indication of a security's momentum. Mathematically expressed as; macd = ma(source, fast_length) – ma(source, slow_length) signal = ma(macd, signal_length) histogram = macd – signal where exponential moving average (ema) is in common use as a moving average (ma) fast_length = 12 slow_length = 26 signal_length = 9 The MACD indicator is typically good for identifying three types of basic signals; Signal Line Crossovers A Signal Line Crossover is the most common signal produced by the MACD. On the occasions where the MACD Line crosses above or below the Signal Line, that can signify a potentially strong move. The standard interpretation of such an event is a recommendation to buy if the MACD line crosses up through the Signal Line (a "bullish" crossover), or to sell if it crosses down through the Signal Line (a "bearish" crossover). These events are taken as indications that the trend in the financial instrument is about to accelerate in the direction of the crossover. Zero Line Crossovers Zero Line Crossovers occur when the MACD Line crossed the Zero Line and either becomes positive (above 0) or negative (below 0). A change from positive to negative MACD is interpreted as "bearish", and from negative to positive as "bullish". Zero crossovers provide evidence of a change in the direction of a trend but less confirmation of its momentum than a signal line crossover Divergence Divergence is another signal created by the MACD. Simply, divergence occurs when the MACD and actual price are not in agreement. A "positive divergence" or "bullish divergence" occurs when the price makes a new low but the MACD does not confirm with a new low of its own. A "negative divergence" or "bearish divergence" occurs when the price makes a new high but the MACD does not confirm with a new high of its own. A divergence with respect to price may occur on the MACD line and/or the MACD Histogram Moving Average Crossovers , another hidden signal that MACD Indicator identifies Many traders will watch for a short-term moving average to cross above a longer-term moving average and use this to signal increasing upward momentum. This bullish crossover suggests that the price has recently been rising at a faster rate than it has in the past, so it is a common technical buy sign. Conversely, a short-term moving average crossing below a longer-term average is used to illustrate that the asset's price has been moving downward at a faster rate and that it may be a good time to sell. Moving Average Crossovers in reality is Zero Line Crossovers, the value of the MACD indicator is equal to zero each time the two moving averages cross over each other. For easy interpretation by trades, Zero Line Crossovers are simply described as positive or negative MACD False signals Like any forecasting algorithm, the MACD can generate false signals. A false positive, for example, would be a bullish crossover followed by a sudden decline in a financial instrument. A false negative would be a situation where there is bearish crossover, yet the financial instrument accelerated suddenly upwards What is “MACD-X” and Why it is “More Than MACD” In its simples form, MACD-X implements variety of different calculation techniques applied to obtain MACD Line, ability to use of variety of different sources, including Volume related sources, and can be plotted along with MACD in the same window and all those features are available and presented within a single indicator, MACD-X Different calculation techniques lead to different values for MACD Line, as will further discuss below, and as a consequence the signal line and the histogram values will differentiate accordingly. Mathematical calculation of both signal line and the histogram remain the same. Main features of MACD-X ; 1- Introduces different proven techniques applied on MACD calculation, such as MACD-Histogram, MACD-Leader and MACD-Source, besides the traditional MACD (MACD-TRADITIONAL) • MACD-Traditional, by Gerald Appel It is the MACD that we know, stated as traditional just to avoid confusion with other techniques used with this study • MACD-Histogram, by Thomas Aspray The MACD-Histogram measures the distance between MACD and its signal line (the 9-day EMA of MACD). Aspray developed the MACD-Histogram to anticipate signal line crossovers in MACD. Because MACD uses moving averages and moving averages lag price, signal line crossovers can come late and affect the reward-to-risk ratio of a trade. Bullish or bearish divergences in the MACD-Histogram can alert chartists to an imminent signal line crossover in MACD The MACD-Histogram represents the difference between MACD and its 9-day EMA, the signal line. Mathematically, macdx = macd - ma(macd, signal_length) Aspray's contribution served as a way to anticipate (and therefore cut down on lag) possible MACD crossovers which are a fundamental part of the indicator. Here come a question, what if repeat the same calculations once more (macdh2 = macdh - ma(macdh, signal_length), will it be even better, this question will remain to be tested • MACD-Leader, by Giorgos E. Siligardos, PhD MACD Leader has the ability to lead MACD at critical situations. Almost all smoothing methods encounter in technical analysis are based on a relative-weighted sum of past prices, and the Leader is no exception. The concealed weights of MACD Leader are such that more relative weight is used in the more recent prices than the respective weights used by the components of MACD. In effect, the Leader expresses more changes in average price dynamics for the recent price movement than MACD, thus eventually leading MACD, especially when significant trend changes are about to take place. Siligardos creates two less-laggard moving averages indicators in its formula using the same periods as follows Indicator1 = ma(source, fast_length) + ma(source - ma(source, fast_length), fast_length) Indicator2 = ma(source, slow_length) + ma(source - ma(source, slow_length), slow_length) and then take the difference: Indicator1 - Indicator2 The result is a new MACD Leader indicator macdx = macd + ma(source - fast_ma, fast_length) - ma(source - slow_ma, slow_length) • MACD-Source, a custom experimental interpretation of mine, MACD Source, presents an application of MACD that evaluates Source/MA Ratio, relatively with less lag, as a basis for MACD Line, also can be expressed as source convergence/divergence to its moving average. Among the various techniques for removing the lag between price and moving average (MA) of the price, one in particular stands out: the addition to the moving average of a portion of the difference between the price and MA. MACD Source, is based on signal length mean of the difference between Source and average value of shot length and long length moving average of the source (Source/MA Ratio), where the source is actual value and hence no lag and relatively less lag with the average value of moving average of the source . Mathematically expressed as, macdx = ma(source - avg( ma(source, fast_length), ma(source, slow_length) ), signal_length) MACD Source provides relatively early crossovers comparing to MACD and better momentum direction indications, assuming the lengths are set to same values For further details, you are invited to check the following two studies, where the first seeds were sown of the MACD-Source idea Price Distance to its Moving Averages study, adapts the idea of “Prices high above the moving average (MA) or low below it are likely to be remedied in the future by a reverse price movement", presented in an article by Denis Alajbeg, Zoran Bubas and Dina Vasic published in International Journal of Economics, Commerce and Management First MACD like interpretation comes with the second study named as “P-MACD”, where P stands for price, P-MACD study attempts to display relationship between Price and its 20 and 200-period moving average. Calculations with P-MACD were based on price distance (convergence/divergence) to its 200-period moving average, and moving average convergence/divergence of 20-period moving average to 200-period moving average of price. Now as explained above, MACD Source is a one adapted with traditional MACD, where Source stands for Price, Volume Indicator etc, any source applicable with MACD concept 2- Allows usage of variety of different sources, including Volume related indicators The most common usage of Source for MACD calculation is close value of the financial instruments price. As an experimental approach, this study will allow source to be selected as one of the following series; • Current Close Price (close) • Average of High, Low, and Close Price (hlc3) • On Balance Volume (obv) • Accumulation Distribution (accdist) • Price Volume Trend (pvt) Where, -Current Close Price and Average of High, Low, and Close Price are price actions of the financial instrument -Accumulation Distribution is a volume based indicator designed to measure underlying supply and demand -On Balance Volume (OBV), is a momentum indicator that measures positive and negative volume flow -Price Volume Trend (PVT) is a momentum based indicator used to measure money flow 3- Can be plotted along with MACD in the same window using the same scaling Default setting of MACD-X will display MACD-Source with Current Close Price as a source and traditional MACD can be plotted eighter as a companion of MACD-X or can be selected to be plotted alone. Applying both will add ability to compare, or use as a confirmation of one other In case, traditional MACD Is plotted along with MACD-X to avoid misinterpreting, the lines plotted, the area between MACD-X Line and Signal-X Line is highlighted automatically, even if the highlight option not selected. Otherwise highlight will be applied only if that option selected 4- 4C Histogram Histogram is plotted with four colors to emphasize the momentum and direction 5- Customizable Additional to ability of selecting Calculation Method, Source, plotting along with MACD, there are few other option that allows users to customize the MACD-X indicator Lengths are configurable, default values are set as 12, 26, 9 respectively for fast, slow and smoothing length. Setting lengths to 8,21,5 respectively Is worth checking, slower length moving averages will lead to less lag and earlier reaction to price actions but yet requires a caution and back testing before applying Highlight the area between MACD-X Line and Signal-X Line, with colors emphasising the direction Label can be added to display Calculation Method, Source and Length settings, the aim of this label is to server only as a reminder to trades to be aware of settings while they are occupied with charts, analysis etc. Here comes another question, which is of more importance having the reminder or having the indicators with multi timeframe feature? Build-in Multi Time Frame features of Pine is not supported when labels and lines introduced in the script, there are other methods but brings complexity. To be studied further, this version will be with labels for time being. EPILOGUE MACD-X is an alternative variant of MACD, the insight/signals provided by MACD are also applicable to MACD-X with early and clear warnings for the changes in the trend. If MACD is essential to your analysis, then it is my guess that after using the MACD-X for a while and familiarizing yourself with its unique character and personality, you will make it an inseparable companion to other indicators in your charts. The various signals generated by MACD/MACD-X are easily interpreted and very few indicators in technical analysis have proved to be more reliable than the MACD, and this relatively simple indicator can quickly be incorporated into any short-term trading strategy
Education
by dgtrd
22
EURUSD 19 AUGUST 2020 RSI to ID accumulation in uptrend.RSI has recently become part of my style. I spent over a year learning how to identify the actions of smart money using volume. Understanding where something is and why its doing what its doing does not require RSI or any other indicator other than volume. I highly recommend that if this is a profession you truly want to pursue, you must spend some time understand volume. Volume is what moves price. With volume, you can very precisely see wether or not buying or selling is active or not. This is arguably the most important thing to understand in the markets and about 99% of people don't, including "experts"... and its actually not that hard. Imagine volume as energy. Energy can be stored (accumulated) and/or released (distributed). If you haven't familiarised yourself with Richard Wyckoff's accumulation and distribution schematics please DDgo them (or google). If you follow me and look and my analysis (thank you very much by the way!) you are probably already familiar with the way I explain things and how I swear by VSA/Wyckoff. RSI settings are slightly adjusted to increase sensitivity. I find these setting very reliable for signalling particularly on the 15 minute and in Forex (still working out some settings with digital). I highlighted the areas of accumulation/re-accumulation. What is critical to understand is that we are only using the 1 hour to judge the condition of the trend (bearish or bullish) and not for entry. The 5 and 15 are used for entry because the smaller time frames convey greater detail. Within those two times frames you can begin more of a range analysis versus a trend analysis (will build on that concept in another chart). Once RSI is below the median line (50 level or a MA) in a positively identified up trend, you can start looking for phase "A" ( selling climax, preliminary support, automatic rally and secondary test). once these are identified the trading range has been established and you can begin looking for phases "C" and "D" for a possible no supply entry after a spring ( or on the spring if you are really good with your risk management). Again, use RSI for your trend analysis to identify these critical pullback areas and never chase.
Education
by dee718
Trend playing with RSII have never been fan of RSI, however after 1,5 years of trading, I decided to give it a shot and find out, whether this famous indicator could be useful for me or not. First of all I was certain, that I will be using this indicator only on higher time frames, I was testing it on 15 minutes TF, but for me, there was just too much "noise" and I found out, that RSI on 1hr is best setup for me. And I found one pattern, that is constantly repeating in TRENDING market and I found this pattern very, very useful. I still think, that best trading advice is "trend is your friend" and I remember when I was always trying to catch bottoms or tops and I always got stopped out and miss continuation of dominant trend. This pattern on RSI is good indication, that trend isn´t finished yet and now you have a chance to get on the "train". This pattern is simple : UPTREND CYCLE: bearish divergence -> bullish divergence -> new swing high -> repeat. DOWNTREND CYCLE: bullish divergence -> bearish divergence -> new swing low -> repeat Of course, you just can´t trade based on this pattern, I am using it with eliott waves, so if I see finished correction or 5-wave reversal and I am also seeing that trend divergence, I will always bet on trend continuation. You also can´t predict any take profit with this pattern, but as a trend follower, it works perfectly.
Education
by Paraman666
1
How to use the Oscar OscillatorOSCAR Oscillator by GenZai Green line is the Oscar Rough Red line is the Oscar By default based on the 8 last candles and smoothed using RMA Purple line is the Slow Oscar By default based on the 16 last candles and smoothed using WMA HOW TO USE Exit signaling This indicator can be used as an exit indicator when line cross each other. Entry signaling When the green line crosses up, it indicates a long entry When the red line crosses up, it indicates a short entry Overbought/Oversold When the indicator crosses the dashed grey lines it indicates Overbought Oversold Slow Oscar Add-on This is an Add-on to the orignal Oscar indicator Can be hidden if you want the original experience of the Oscar indicator. Can be used as a confirmation indicator by looking at the direction of the slope to verify is your are trending long or trending short. Can be used as a baseline to confirm signals given by Oscar Can be used to tweak your signals and test different settings. Stock or Forex? The program was originally written for stocks, but works equally well with the Forex market. How this indicator is calculated ? This is the formula we use to calculate the Oscar: let A = the highest high of the last eight days (including today) let B = the lowest low of the past eight days (including today) let C = today's closing price let X = yesterday's oscillator figure (Oscar) Today's "rough" oscillator equals (C-B) divided by (A-B) times 100. Next we "smooth" our rough number (let's call it Y) like this: Final oscillator number = ((X divided by 3) times 2), plus (Y divided by 3). SETTINGS: You can choose between different smoothing options: RMA: Moving average used in RSI. It is the Adjusted exponential moving averages (also known as Wilder's exponential moving average) SMA : Simple moving average EMA : Exponential moving average WMA : Weighted moving average The Script can be found here:
Education
by GenZai
5
ETHUSD 4H RSI 80-20 TRADING STRATEGY SHORT TRADERSI 80-20 TRADING STRATEGY SHORT TRADE RULES 1 - Find Highest candle in the last current 50 bars. 2 - That High candle coupled with RSI above 80 level. 3 - Wait for a new Swing HIgh but RSI is lower - DIVERGENCE. 4 - ENTER on breakout candle close below 1st candle's low. 5 - Stop Loss above new swing high. 6 - EXIT with a 1 to 3 risk reward Take Profit. Add RSI to chart Adjustments: 14 period, to 8. 70 and 30 lines, to 80 and 20. This indicator comes standard on most trading platforms. You’ll just need to make the adjustments above. Step 1 - Find the currency pair that is showing a high the last 50 candlesticks. (OR low depending on the trade) The 80-20 Trading strategy can be used for any period. This is because there are reversals of trends in every period. This can be a swing trade, day trade, or a scalping trade. As long as it follows the rules, it is a valid trade. We also have training for building a foundation before a forex strategy matters. In this step, we only need to ensure it is the low or the high of the last 50 candles. Step 2 - Using the RSI Trading Indicator: When we find 50 candle high, it needs to be coupled with RSI reading 80 or higher. (If it’s low it needs to be combined with the RSI reading 20 or lower.). We have a reading that hit the 80 line on the RSI and was the high the last 50 candles. Once we see that we had a high, the last 50 candles, and the RSI is ABOVE 80, we can move to the next step. Remember that this strategy is a reversal strategy. It is going to break the current trend and move the other direction. Step 3 - Wait for a second price (high candle) to close after the first one that we already identified. The second price high must be above the first high. Although, the RSI Trading indicator must provide a lower signal than the first. Remember that divergence can be seen by comparing price action and the movement of an indicator. If the price is making higher highs, the oscillator should also be making higher highs. If the price is making lower lows, the oscillator should also be making lower lows. If they are not, that means price and the oscillator are diverging from each other. Which is why it’s called “divergence.” Just because you see a bullish or bearish divergence, doesn’t mean you should automatically jump in with a position. We have rules in place that will capitalize on this divergence so that we can make a significant profit. Keep in mind, that this step may take time to develop. It is very important to wait for this second high because it gets you in a better trade making position. Price goes up/RSI goes down. That is the Divergence. Remember that our example is a current uptrend looking to break to the downside. If this was a 50 candle low, we would be looking at the exact opposite of this step. Step 4 - How to Enter the Trade with the RSI Trading Strategy. The way you enter a trade is very simple. You wait for the price to head in the direction of the trade and wait for a candle to close below the first candle that you identified that was previously 50 candle high. Step 5 - Once you make your entry, place a stop loss. To place your stop, bump back 1 to 3 time periods and find a reasonable, logical level to put your stop. You are looking for prior resistance or support. We placed our stop below this support area. That way if the trend continued and did not break, it could hit this level and bounce back up in our direction. Step 6 - I recommend you follow at least a 1 to 3 profit vs. risk level. This will ensure that you are maximizing your potential to get the most out of the strategy. You can adjust as you wish. Keep in mind that most successful strategies that identify breaks of a trend use a 1 to 3 profit vs. risk level.
COINBASE:ETHUSDEducation
by Tradingstrategyguides
Overbought to Oversold - Keep It Simple, Stupid!After exploring the depths of profit taker heaven and stop loss hell, after combining many different indicators, finding correlations with momentum, trend, volatility, you name it... After trying to adjust the strategies to different assets, asset classes, market conditions... After finding out that each of these steps are way more difficult than I thought and will require much more rigor and a start from scratch... I remembered the golden rule of strategy... "Keep it simple, stupid!" When others are buying like rabid dogs, you sell... When others are selling like mad monkeys, you buy... When others are greedy, you are fearful... When others are fearful, you are greedy... So, we trade from overbought to oversold. No profit takers, no stop losses, no optimization for a specific stock or time frame or asset class, no correlation with other indicators... Just overbought to oversold. Win rate of 90+%, profit factor of over 5.0, compared to holding the stock indefinitely with a loss of 80%. Happy trading!
AEducation
by ralphschraven
4
Kyber Network (KNC USDT) - Breakdown of Recent Trades I recently took two discretionary positions on KNC/USDT. In this analysis I've documented my thought process and execution sequentially from left to right in the call outs. In these trades I used several methods of analysis. 1. Chart Patterns My first trade entry was predicated upon a Rectangle Top Pattern I identified KNC forming. Rectangle Tops occur during bullish up trends and when the overall market is bullish, as altcoins currently are, they have a high probability of breaking to the upside. 2. Trend Analysis Fundamental to my trading strategy is trading in the direction of the overall trend. Trading against the dominant trend is like stepping over dollars to pick up pennies. Using the Daily and 4HR time frame, I identified that KNC was above my Base Line indicator, therefore confirming a bullish trend and that I should be trading to the long side. 3. Target Measurement For my initial trade I used Bulkowski's measurement method for Rectangle Tops, measuring the difference from Resistance to Support and adding that to Resistance. This proved to be successful, however my first trade ended up running quite a bit beyond my target. For this reason I used my primary method of profit taking, 50/50. I take 50% of my profit at a pre-determined level and allow the rest of my position to run to take advantage of powerful trends. 4. Indicator Support Utilizing my ICYSbot indicator and strategy to help supplement entry and exit conditions. 5. Patience and Risk Management I used a position sizing strategy where a pre-determined percentage of my account is at risk should my trade hit the stop loss. In this case, I personally used 2% risk per trade. I also did not rush these trades, I let price evolve and the trend emerge as it did. I attached no personal bias or feelings toward the trade. Overall, quite happy with these trades. I hope this post was helpful in providing insight into how I view the markets and trade execution. Thank you for your support. Trade safely!
Education
by CrackingCryptocurrency
Awesome OscillatorThe Awesome Oscillator (AO) is displayed as a histogram showing the market momentum based on a comparison of the simple moving average (SMA) of the last 5 price bars median to the simple moving average of the last 34 price bars median. MEDIAN PRICE = (HIGH+LOW)/2 AO = SMA(MEDIAN PRICE, 5)-SMA(MEDIAN PRICE, 34) When the momentum of the past 5 bars is weak compared to that of the 34 bar period, the AO displays this shift as a red bar. When the recent 5 bar momentum is stronger, the AO displays the shift as a green bar. The AO displays these shifts by a series of red and green bars. Series of red bars indicate declining bias. Series of green bars indicates rising bias. Related to the AO are Zero Line Cross Over , Twin Peaks Patterns , and Price/Momentum Divergence . When the AO is added to other technical indicators, such as Divergent Bars and Bollinger Bands, traders are able to assess which way a stock is likely to move. The AO can help see what is coming! Zero Line Cross Over When the AO crosses over the zero line, moving from above the zero line to below the zero line, this is a declining bias indicator. A rising bias is indicated when the AO crosses over the zero line, moving from below to above. Twin Peaks The Twin Peaks pattern indicates a declining bias when the AO forms a series of green and red bars where each transition from green to red (a peak) is smaller than the previous peak. A rising bias is indicated when the AO forms a series of green and red bars where each transition from green to red (a peak) is larger than the previous peak. Price/Momentum Divergence Declining Bias - When the AO shows declining momentum and, during the same time period the price of the stock is showing a rising trend (higher highs and higher lows), there is divergence that is forecasting an eventual decline in the price. When momentum weakens, price may still rise for a period however, without momentum the price will snap back because there is not enough buying volume to maintain the upward price momentum. Imagine a rubber band stretched between the two ends of the “V” formed by the two trend lines. In the chart example above, you can see the strong divergence between rising price and declining momentum. The price ended up snapping back in line with the AO and then continued to move lower. Rising Bias - When the AO shows rising momentum and, during the same time period the price of the stock is showing a declining trend (lower lows and lower highs), there is divergence that is forecasting an eventual rise in the price of the stock. When momentum strengthens, price may still decline for a period however, eventually increasing momentum will push the price higher.
Editors' picks
SP:SPXEducation
by NewCycleTrading
9
BTCUSD 4 hour RSI signalling RSI sensitivity at 7 Instead of 70/30, levels are set at 80/20. Using RSI as an adjunct/signal tool. Note the volume anytime RSI breaks the 20 level. You can set an alert at 20/30. Whenever price breaks this level you will be alerted and there may be a potential long situation setting up. RSI can convey divergences between price and volume. Also can be used as a final confirmation. for example, you are about to enter long but notice RSI hovering around the 50 level: Middle of range, not ideal. Takes patience but there are opportunities off of the 20 RSI if you understand volume. practice*
COINBASE:BTCUSDEducation
by dee718
EURUSD 1H RENKO CHART STRATEGY #2The second simple Renko Trading Strategy system is an indicator based strategy that uses price-momentum divergence to identify trend reversals. Renko Trading Strategy #2 For this Renko trading strategy, we only need to use the RSI indicator. We can use a 14- period or a 20-period RSI indicator. So, use the same period as the ATR 14 or 20 Renko brick size. After we spot the momentum divergence an entry signal is triggered once we get a reversal. On the Renko chart, a trend reversal is set in motion once the brick changes color. In this case, when we spot a bearish divergence, enter a short position after the brick turns red. For bullish divergence, wait for the brick to turn green. We exit our profitable trade once another reversal pattern is formed in the opposite direction of our trade. As a method to protect our account balance and not lose too much, you can place your SL above and below the swing point developed after your entry. A lot of the noise inherent in regular time-based charts are eradicated. So, if you trade with Renko charts, spotting divergence and trend reversals are a lot easier. The RSI is the best indicator to use with Renko. Read the previous Renko Chart post to learn about Renko chart system.
Education
by Tradingstrategyguides
1
CLQ0: Corrective Formation Oil has been very bullish as of lately; the September delivery contract is up by almost 100% from its YTD low. The hidden bullish divergence implies a significant amount of pullback continuation players in the market. Trying to follow the momentum by buying dips and being alert for signs of bearish reversal is the prudent approach. The risk of a fast bear action that sheds at least 1/8th of the value is ever more present the further upside oil sees from here.
NYMEX:CLQ2020Education
by Zoen_Trieste
1