The premise of the zones is as follows :
the zones , which are the orange boxes, present a target for price expansion. Once price CLOSES outside of any zone, not just the wick but the candle, there is a 70% chance it will travel that path to the next zone, before closing out from the zone which it came from. There is a caveat, for the orange line on the chart, between two of the zones, there is a 70% chance price will reach the orange line, not follow through to the end, though it may , as per my backtesting its not as certain as simply assuming it will touch the orange line.
Furthermore, If price reaches the end of one zone, and RSI + MFI are both overbought or oversold, this is a good indicator price may reverse to the zone start.
A good time to take profit for me is if price reaches the end of a zone, or if the MFI and RSI are overbought or sold against my position, I usually exit as that is a deccent signal for price reversal.
The zones should be used as a DIRECTIONAL BIAS , meaning that if the zones are for the hourly chart, you should be looking to enter on a lower timeframe, using your own trading strategy, this simply confirms you entry and tells you which trades might be good to avoid.
It can be used as a standalone strategy but I prefer to use it's bias for a few quick trades on a lower timeframe rather than wait the entire zone or risk a spike out, where price might enter the stop loss area, but not close on that end of the zone, and go the way it was predicted, this as you can guess, is a valid trade idea for a high RR trade reversal!
Dont just take my word for it..... look at the proof ......
the zones , which are the orange boxes, present a target for price expansion. Once price CLOSES outside of any zone, not just the wick but the candle, there is a 70% chance it will travel that path to the next zone, before closing out from the zone which it came from. There is a caveat, for the orange line on the chart, between two of the zones, there is a 70% chance price will reach the orange line, not follow through to the end, though it may , as per my backtesting its not as certain as simply assuming it will touch the orange line.
Furthermore, If price reaches the end of one zone, and RSI + MFI are both overbought or oversold, this is a good indicator price may reverse to the zone start.
A good time to take profit for me is if price reaches the end of a zone, or if the MFI and RSI are overbought or sold against my position, I usually exit as that is a deccent signal for price reversal.
The zones should be used as a DIRECTIONAL BIAS , meaning that if the zones are for the hourly chart, you should be looking to enter on a lower timeframe, using your own trading strategy, this simply confirms you entry and tells you which trades might be good to avoid.
It can be used as a standalone strategy but I prefer to use it's bias for a few quick trades on a lower timeframe rather than wait the entire zone or risk a spike out, where price might enter the stop loss area, but not close on that end of the zone, and go the way it was predicted, this as you can guess, is a valid trade idea for a high RR trade reversal!
Dont just take my word for it..... look at the proof ......
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.
Penafian
Maklumat dan penerbitan adalah tidak dimaksudkan untuk menjadi, dan tidak membentuk, nasihat untuk kewangan, pelaburan, perdagangan dan jenis-jenis lain atau cadangan yang dibekalkan atau disahkan oleh TradingView. Baca dengan lebih lanjut di Terma Penggunaan.