Hidden divergence - page 64
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One last thing about Formations - Movement Formations clearly define a Trend. Even if it consists of 3 candles. (To the question of how to define a trend or a flat, but we define reversals by the presence of a new trend...)
That's the end of the topic. hopefully ...
If you would be so kind as to explain on a chart how to clearly define a trend using Formations, and how to distinguish a correction from a trend would be great.
OZ0 19.08.2008 15:23
There has been a correction and the trend has continued. Watching Formations.Attaching the CCI analogue with Bollinger in mind.
For the indicator, thank you. And how do you use the channel?
If you would be so kind as to explain on the chart how to clearly define a trend using Formations, and how to distinguish a correction from a trend, that would be great.
Let's read the definition (taking into account that candles are counted backwards and we start with the 3rd candle, we may start with the 5th ... 10th ...):
If the High of the 2nd candle is higher than the High of the 3rd candle and at the same time the Low of the 2nd candle is higher than the Low of the 3rd candle, we have a Movement Formation (a trend of 2 candles) with the vector pointing upwards.
If the Hi of the 1st candle is higher than the Hi of the 2nd candle and simultaneously the low of the 1st candle is higher than the low of the 2nd candle, we have a move formation (it is a trend of 3 candles) which vector keeps going upwards.If we entered the position on the 2nd candle and the close of the 1st is higher than the close of the 2nd, we can close the position in profit.
If we wait for the trend to develop, and the ratios will continue to hold, we will make more money.
If the Lows of the 1st candle goes below the Lows of the 2nd candle, we may close the position at a loss, or we may wait for the situation to develop. Here we need to connect additional filters. Timing, levels, events, .....
Usually when there is divergence beyond oscillator levels it is better to keep the position minimal. Then we close extra lots when the Lo of a candle crosses half of the range of the previous formation.
Take the USDCHF M15 yesterday August 19 (see pictures on the previous page) there are arrows (I am too lazy to draw the explanations). Arrows that do not meet the condition High[i+1]>High[i+2]&&Low[i+1]>Low[i+2] do not count. There are at least 6 segments where it is true. And so many more in the opposite direction.
The channel, by the way, is not Bollinger, but ordinary (smoothed) one, and it is built on the moving line calculated by the way of ribbons, but using CCI formula with corrections. The indicator lines are based on High and Lo.
You've got it twisted, don't you?
But never mind. The indicator is very sensitive. On the move up, we look for a crossing of the upper line of the channel with the line of the High indicator. And when moving downwards we pay attention to the crossing of the lower line of the channel by the line Lo. Crossing of both lines of the channel is the first sign of change in the trend. Divergences are also visible on the channel, usually waiting for a second entry into the channel. Levels and crossovers of trend lines with the indicator and channel lines are also used, as well as ..... and also ahead of the crossover with the channel lines. etc.
Or you mean the channel I linked? Or the channel on the price chart, but it has a midline and boundaries and levels ...
Or are you referring to the channel I linked to? Or the one on the price chart, but that one has a midline and boundaries and levels...
That's right, the one on the CCI chart.
Thank you, I will try to deal with it (with formation rules)
Posted the material on Turtles. The book itself is here The key to successful trading ...
If you need an indicator, I will post it.
Posted material on Turtles.
If you need an indicator, I'll post it.
>> Thank you.
>> Put it out there, of course. We'd appreciate it.
I propose to discuss - article
Figure 4 shows four formations that we will call fractals and describe all price chart oscillations with their help. Formation A will be called a "true bullish fractal". Correspondingly, B is a "false bullish fractal". Formations C and D are "true bear fractal" and "false bear fractal".
Fig. 4. New view of the fractals. Four formations which completely represent the structure in price movement.
Suggestion for discussion - article
Everything written in the article explains perfectly how things happened in the past and has little to do with real trading. Turn on your tester and try to trade on these formations. This is of course my personal opinion.
and now these leverages? .i.e. could the constituents of MW figures be more effective.