Monday 8 June 2020
Thursday 21 May 2020
Dummy Trend Pattern by Stock Alphabets
May 21, 2020
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2 comments
Dummy Trend pattern:
Dummy trend pattern design by Rahulprasad Yadav deciding to change short term trend consist of combination three candlestick pattern either red or green
if red candle then 1st & 2nd candle lower low,2nd & 3rd candle higher high
if green candle then 1st & 2nd candle Higher high,2nd & 3rd candle lower low
TRADING TOOLS
- Time frame: Intraday((15 minute) / Positional(Daily)
- Candlestick
RULES FOR LONG/Short TRADE
- If green candle then 1st & 2nd candle Higher high,2nd & 3rd candle lower low
- After closing 2nd(High) and 3rd candle(low) take entry either side break
- if your looking for Buy Enter into the trade after completion of the candle and put stop-loss at the swing low of this candle vise versa
RULES FOR SHORT/Long TRADE
- If green candle then 1st & 2nd candle Higher high,2nd & 3rd candle lower low
- After closing 2nd(High) and 3rd candle(low) take entry either side break
- if your looking for Buy Enter into the trade
- after completion of the candle and put stop-loss at the swing low of this candle vise versa
- Enter into the trade after completion of the candle and put stop-loss at the swing high of this candle
Friday 1 May 2020
3 Bar Net Line Strategy
May 01, 2020
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2 comments
The 3 Bar Net Line Strategy was made famous by Joe Stowell. The 3 Bar Net Line Strategy is a price action strategy to determine the change of trend. No lagging indicators are used in this strategy. And because price action is used as the only means to determine the change of trend, this method can be used alongside existing methods such as moving averages to confirm the trend change and thus allow traders to trade in the direction of the trend.
What is the 3 Bar Net Line Strategy?
Existing trend: DownAim: Determining change of trend from ‘Down’ to ‘Up’
- Find the lowest low in price and mark the high of this bar as #1
- Compare this high to the most recent higher high and label this bar as #2
- Using the high of #2 bar, find the most recent highest high and label this bar as #3
- The high of the #3 bar becomes the three bar net line. When prices close above the high of the #3, it signals a change of trend.
Aim: Determining change of trend from ‘Up’ to ‘Down’
Find the highest high in price and mark the high of this bar as #1
Compare the low of the bar #1 to the recent lower low and mark this as bar #2
Look for the lowest low of bar #2 and label this bar as #3
When prices close below the low of bar #3, it signals a change of trend from Up to down
Notes:
When new highs or lows are formed, repeat the process
Ignore any inside bar that are formed
The above screenshots shows how using Stowell’s 3 Bar Net Line Strategy set up, you can anticipate potential change of trend as they happen.
As you can see by now, the trading strategy can be customized in different ways. For example, when trading with divergence, you can make use of the 3 Bar Net Line Strategy to confirm the change of trend and then take positions accordingly.
Another way to trade the three bar net line strategy is to apply moving averages. First, wait for confirmation of a change of trend from the 3 bar net line strategy and then wait for the moving averages to confirm the same and then enter a position.
The chart below illustrates both a buy and a sell signal by combining the 3 Bar Net Line Strategy and the moving averages (20/50 EMA’s).
Notice how the three bar net line first gives us a signal of a potential change of trend on a break of the three bar net line. The change of trend is then confirmed by the moving averages confirming the trend as well.
In both the entries, the set ups were really smooth leaving no subjectivity. Another important factor is that by using the three bar net line, traders can gain more confidence in trading something as simple as moving average crossover.
The 3 Bar Net Line Strategy is very simple and easy to master. There isn’t much of subjectivity involved when identifying the highs and the lows in prices. It might perhaps take some practice on your part but it’s all gonna be worth it as this will become a lifelong money making skill for you and your family.
When new highs or lows are formed, repeat the process
Ignore any inside bar that are formed
The above screenshots shows how using Stowell’s 3 Bar Net Line Strategy set up, you can anticipate potential change of trend as they happen.
How to trade the 3 Bar Net Line Strategy
As you can see by now, the trading strategy can be customized in different ways. For example, when trading with divergence, you can make use of the 3 Bar Net Line Strategy to confirm the change of trend and then take positions accordingly.
Another way to trade the three bar net line strategy is to apply moving averages. First, wait for confirmation of a change of trend from the 3 bar net line strategy and then wait for the moving averages to confirm the same and then enter a position.
The chart below illustrates both a buy and a sell signal by combining the 3 Bar Net Line Strategy and the moving averages (20/50 EMA’s).
Notice how the three bar net line first gives us a signal of a potential change of trend on a break of the three bar net line. The change of trend is then confirmed by the moving averages confirming the trend as well.
In both the entries, the set ups were really smooth leaving no subjectivity. Another important factor is that by using the three bar net line, traders can gain more confidence in trading something as simple as moving average crossover.
3 Bar Net Line Strategy – Simple and powerful
The 3 Bar Net Line Strategy is very simple and easy to master. There isn’t much of subjectivity involved when identifying the highs and the lows in prices. It might perhaps take some practice on your part but it’s all gonna be worth it as this will become a lifelong money making skill for you and your family.
Tuesday 14 April 2020
Price Action Strategy lover
April 14, 2020
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1 comment
Double Low Higher Close (DBLHC)
Double Low Higher Close is another classic bullish reversal pattern loved by Price Action traders.
What are Double Low Higher Close (DBLHC) Patterns?
The DBLHC pattern consists of two candles.
The Lows of both candles need to be very close (within few pips).
The Close of the 2nd bar need to be Higher than the previous bar's high.
Why are Double Low Higher Close (DBLHC) Patterns formed?
Price tests support level twice but is rejected and cannot close below.
DBLHC pattern represents a sudden shift in the order flow, which can often be a telling sign of a short or long term uptrend.
DBLHC pattern represents a sudden shift in the order flow, which can often be a telling sign of a short or long term uptrend.
How to find Double Low Higher Close (DBLHC) Patterns?
Price Action Tracker has you covered, the candlestick scanner will scan, in real time, all your favorite markets and time-frames and alert you as soon as a Double Low Higher Close (DBLHC) Patterns is detected.
How to trade Double Low Higher Close (DBLHC) patterns?
Double Low Higher Close can be traded as a reversal candlestick pattern when found at the bottom of a short term trend and validated by support levels.
Where to Place your Entry, Stop Loss and Take Profit?
There are three ways to enter a Key Engulfing reversal trade. They all have Pros and cons and really depend on the trader as well as the market conditions.
Aggressive entry (Candle close Entry)
Simply place a market entry.
Standard entry (Break of candle Entry)
Enter on a break of candle by placing a stop order just beyond the candle (1 or 2 pips).
Retracement Entry
Wait for the market to retrace to some extent before entering a trade.
Using retracement entry to get better Risk: Reward scenario can be very profitable but you might miss on a lot of trade if the market doesnt retrace.
Most traders always use the 50% retracement entry, but before deciding of a % figure you should always ask yourself what kind of price action environment are you in? Are we in a trend or a range? What are previous high and previous low? And then decide where the retracement entry would make the more sense (could be 33%, 60% or even 75%).
Going for a 50% retrace entry each time will get you a retail traders entry, not a professional one.
Using retracement entry to get better Risk: Reward scenario can be very profitable but you might miss on a lot of trade if the market doesnt retrace.
Most traders always use the 50% retracement entry, but before deciding of a % figure you should always ask yourself what kind of price action environment are you in? Are we in a trend or a range? What are previous high and previous low? And then decide where the retracement entry would make the more sense (could be 33%, 60% or even 75%).
Going for a 50% retrace entry each time will get you a retail traders entry, not a professional one.
Stop loss
Stop loss is a level in the market that would need to be breached for you to be prove wrong and get you out of an investment.
A good rule of thumb is to place your stop loss few pips beyond the tail of the bar.
When to move Stop Loss
Once a trade has triggered and price has moved in your favor a bit, you can move your stop loss to break even.
I personally move my stop loss to break even once a candle has closed above the 1:1 target.
I personally move my stop loss to break even once a candle has closed above the 1:1 target.
Take Profit
This is left to the trader’s discretion, however a good profit target is to use the next key level of resistance for a long trade, or the next key level of support for a short trade.
Traders should always aim for a return on investment higher than 2:1, if your Profit/Risk ratio is lower than 2:1 you may want to skip that trade or amend your Entry point in order to get a much better Profit/Risk ratio.
Traders should always aim for a return on investment higher than 2:1, if your Profit/Risk ratio is lower than 2:1 you may want to skip that trade or amend your Entry point in order to get a much better Profit/Risk ratio.
Our Position Size Calculator will allow you to decide if a trade is worth to take, when to enter it and what should be the right position sizing.
Summary
DBLHC patterns are great to trade, but like all price action setups and patterns, they perform better when used in conjunction with a trend or support levels, this is why using our Price action indicator and its price action filters is so important.
Friday 10 April 2020
Moving Average Strategy
April 10, 2020
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2 comments
Moving Average Strategy
Charting Tools: 10,15&30-Min. Intraday charts
Technical Tools: 20& 200 period
‘simple’ moving averages.
Buy & Sell Setup: The Stock Alphabets Buy & Sell
Setup.
Long positions are favored when prices are Above their 200-MA and 20-MA on a 30-Min.
chart Entry points are found on 5,10,15-Min. charts.
Short
positions are favored when prices are below their 200-MA
and 20-MA on a 30-Min. chart Entry points are found on 5,10,15-Min. charts.
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