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It is my belief that just about anyone, with
time and practice, can develop peripheral
awareness in the market. Observing uptrends and downtrends that
may be viewed within larger time compressions as trends will
reveal S90/Crossovers, just as vertical trading ranges will. The
illustrations in this chapter offer a few different views of how
Fibonacci levels may be observed, as well as trading ranges or
trends within trends.
This main trend is an uptrend. Within this,
there are smaller downtrends. Trends within trends can happen on
any time compression and any chart: The market has to go down to
go up and vice versa.
A weekly candlestick chart has 2,016 five-minute candles that
have been moving in
uptrend and downtrend patterns for a week before a weekly candle
has had time to mature. Let’s assume that white candles are
bullish and dark candles are bearish:
L On a five-minute time compression, if the
bulls were in power during a week, then more white candles will
be present, and the one weekly candle that will appear at the
end of the week as a summary of the historical trading that has
been completed for the week will be a white candle, representing
that there were more buyers in the market than sellers during
the previous week.
L If more dark candles are present on the
five-minute chart than white candles during a given week, then
bears were in control, and the one weekly candle that will
appear at the end of the week as a summary of the historical
trading that has been completed for the week will be a dark
candle.
A one-hour candlestick represents the price action of 12
five-minute candles; the
30-minute candle is the equivalent of 6 five-minute candles; and
the four-hour candle comprises 48 five-minute candles; and so on
with any time compression
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There is a lot going on within each time
compression, and any time something or a pattern is being
duplicated, you should become aware of potential or
possibilities of profitable trading entries or exits, especially
if you’re already in a trade.
We should look at trends, Fibonacci levels, and S90/Crossovers
that may be found in all time compressions in regard to their
particular world. A five-minute world is much different than one
found within a one-hour chart compression or a daily chart. Most
traders focus on drawing horizontal lines based on derived
levels from a vertical view of their favorite time compressions.
In contrast, more advanced traders not only consider several
time compressions but also draw uphill and downhill lines to
follow the trends as they look for breakouts to enter. Along
with the trend wall breach entries, traders may look for gaps,
S90/Crossovers, and/or ROI Fibonacci strikes as possible targets
or entries.
This type of peripheral awareness in the market, which allows
you, as a trader, to turn over all of the stones, develops with
time and eventually becomes automatic—just like driving a car,
flying an airplane, or riding a bicycle. Traders eventually
become automated at recognizing opportunities and confirmations
for a trade. It just takes patience, time, practice—and
sometimes a lot of money if you’re not selective.
Àssuming we are working with a downtrend,
you would use a slow- and-fast-moving volume average, and begin
by drawing the trend line for the resistance side of the trend.
Once you’ve drawn that trend line, then you can begin looking
S90/Crossovers, Trend Bounces, and at other types of
confirmations. (Traditional confirmations are not explored in
this book, because the focus in on modernism and proprietary
systems.) more reed |
