Trendfollowing
Worst is over - BTC 2022 - BULLISHAs a result of the current market instability, some investors are panic selling, while others are clinging on in the hopes of a recovery. In just three months, the value of Bitcoin has fallen by more than 60%... On the weekly TF, we've reached the 200 SMMA trendline. Since 2015, we've been relying on this support trendline... Is this time any different? Well soon we'll find out.
Looking at the monthly TF we also are testing the 50 SMMA trendline. It is only if we lose this key level that we can consider a new idea:
The shark harmonic pattern, which has a target of approximately $12,000 for the next long opportunity.
Right now, though, we've reached a bottom and this represents one of the best buying opportunities.
Altcoins retraced more than 90% and showing great chart setups.
Does it mean we won't see any further decline? No doubt we can, however if we look at the overall picture, we can argue that purchasing cryptocurrency at a discount is a good deal.
ABBV - FUNCHARTS - Follow the TrendNote: Funcharts are interesting charts I have found that offer a potentially unique perspective on a stock. Sometimes I’ll throw something out there that you might find controversial or wrong headed. If that’s the case your 2 cents worth is most welcome.
Abbvie (ABBV) listed on the US market sets up nicely as a Trend Following stock. If you are in Tradingview insert the Supertrend Strategy and change the inputs to a 50 period ATR length with a factor of 2 times ATR trailing stop.
The strategy will buy when the daily closing price closes above the ATR trailing stop and go short when the price closes below the ATR trailing stop (shown in blue and red on the chart).
A look at the performance summary for long trades shows 44% winning trend with a win:loss ratio of 2.22 with a profit of over 109% through the period. Whilst buy and hold was the best strategy overall the drawdown was much lower for the trend following strategy and almost as much money was made. Stock like this that trend nicely, whilst allowing you to manage downside risk can be used with a certain amount of leverage as it follows the age old mantra of letting profits run and cutting losses early.
As with all trend following strategies, a low win rate but high win:loss ratio is to be expected.
AXP - FUNCHARTS - American Express MusingsNote: Funcharts are interesting charts I have found that offer a potentially unique perspective on a stock. Sometimes I’ll throw something out there that you might find controversial or wrong headed. If that’s the case your 2 cents worth is most welcome.
So much for stock selection, American Express ( AXP ) was the first stock on my list, even above AAPL , and here I was thinking my list was in Alphabetical order, of which my offsider will be quick to point out that I should be using a Mac, not a PC... moving on, What is the best way to trade American Express based on the Technical numbers?
There are two tests I run to determine the best way to trade. Firstly let's run the numbers on long term trends. I used the Supertrend Strategy for this. Adjust the inputs so we use a length of 50, thus smoothing out the ATR volatility and then use an ATR value of 6. In layman's terms this means we are running a 6 x ATR (chandelier) trailing stop. When price closes below the trailing the test generates results for entering short trades, and when price closes above the trailing stop the test generates results for long trades. Refer to the performance report below (and be aware there is a drop down menu on the strategy name to flick between the longer term trend following system and the shorter term mean reversion system). Also, make sure you view the Performance Summary, not Overview, we are specifically looking at the comparison between long and short trades.
The first test - Taking Long Trades in line with the trend (when price is above the blue line) made money, 274% to be exact with profitable trades 38% of the time, meaning the win:loss ratio at 2.67 had to be favourable, which it was. But wait going short into a down trend (selling when price is below the red line) lost big! 322% to be exact, so historically you made (slightly) more money buying the big pull backs, as opposed to the breakouts but the drawdown was bigger as you get stuck in losing trades. However, what this is really saying is more money was made from Buy and Hold on AXP (historically), as opposed to breaking the market into an uptrend/downtrend regime.
The second test - Let's now look at the short term. Again we will use the Supertrend Strategy, this time we will use 3 periods for the ATR length and 1.5 as the ATR factor, thus looking at very short term trends (sub 30 days). Further I have flipped the signals so it buys into a short term downtrend and sells into a short term uptrend. Use the Performance Summary below (not Overview) to take a look at Long Trades and Short trades, the strategy name is Supertrend STRATEGY (with STRATEGY in uppercase, not lowercase). Here buying the dips made money but not much winning 66% of trades with a profit factor of 1.18 (low) so buying short term dips was sub optimal. Looking at selling short term rallies however was very poor, you lost money. If you went short a rally (in the short term, when the close crossed above the supertrend trailing stop and exiting when it crossed below) the resulting loss was 147%. It therefore made more sense to enter long AXP in line with the short term trend, as opposed to entering early and buying the dip. Nonetheless, the result in the short term wasn't staggering either trading either long or short.
Given the results were not great on a daily chart either way, I changed the chart to a weekly chart, after all, if you are following so far, you would have seen that AXP was (slightly) better as a countertrend strategy in the longer term. Running the same strategy as in the second test on a weekly graph the results improve significantly, going long on a dip made 172%, winning 82% of the time. That is a great setup, in fact pretty good as a stand along trade. But if you want to run stops and manage risk, rather than being stuck in losing trades for a long term, you could use the week chart as a setup, and then enter in line with the short term trend on a daily chart using the second tests strategy above...
Overall the conclusion is you should use a mean reversion strategy (buy the dips) on American Express with a weekly chart, but use a shorter term trend following system to trade it on a daily chart .
Where are we now? Well it just so happens that on a weekly time frame the stock is in buy territory according the the Supertrend STRATEGY and on a daily chart is pretty close to a short term uptrend...
Did this make sense, let me know if you have any questions!
US Oil Battles With 2011 HighThe price of US Oil has not consistently traded above the May 2011 high at $114.79
since the high was formed as price has not remained above this level.
Price did move above this resistance in March, May, and June, but the sellers forced
price back down again.
We have a major support level below price in the form of the $100 round number,
which may prevent price from declining further.
So far this month, the candle is bullish, but this could change as we are only a few
days into the month. If the buyers can gather enough momentum, we should see
another attempt above resistance.
There is nothing to do now except wait for a clear trend direction to form. Trying to
go long now could see your position close out for a loss if price reverses sharply at
resistance again.
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Bitcoin Breaks Major Support From 2017It is still early in the month, and the week has only just started, but Bitcoin is now trading
below a major support level which has now turned resistance.
Last month, price bounced off the December 2017 high support level at $19,666. The sellers
have taken control so far this month but will price close above this level by the end of the month.
Bitcoin has been displaying signs of weakness since November 2021, so we are now waiting
for a strong support level to prevent price from declining further.
Once we see a change in this market’s behaviour, we will look for opportunities to go long.
The early signs of a bullish reversal is a pattern of higher highs and higher lows on the daily
timeframe. The next sign is price breaking above multiple resistance levels. Patience until then.
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COPPER Copper has rejected an important level also violated EMA's to show a clear correction. Natural gas following the same path lagging but to follow the similar path I think, Option Volatility in commodity currencies such as AUD,NZD have been of interest the past two weeks.
Selling commodities and Commodity currencies, Buying the Dollar and waiting for and an entry signal to get back in to Equities, My ideal trades till September.
Silver is leading Copper.
Will Bitcoin Go Higher Or Lower?Bitcoin has declined further since the last post, dropping down through the
weekly 200 simple moving average which is now resistance.
Price also declined below the $20,000 round number but has since moved
back above this level and is slowly creeping back towards the moving average.
This current move up does resemble a pullback, and if it is then we will likely
see a continuation to the downside.
Historically, a trend has usually followed a bounce off the weekly 200 simple
moving average so we will have to see if history is set to repeat itself.
There is nothing much to do with Bitcoin right now and the best position to
hold is standing aside until we start to see signs of bullish moves to long,
or bearish moves to go short.
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S&P To Break $4000?The S&P 500 has moved further away from last year’s low support level at $3662
which is proving to be a strong level to break.
There is now a long wick below June’s candle after price bounced hard off that
level, but will it be the start of the resumption of the bull trend.
May’s candle closed as an indecision candle with a long wick but price still exceeded
the low of May. A long wick does not guarantee a trend resumption but a pattern of
higher highs and higher lows on the daily timeframe suggests a possible trend resumption.
Price still remains below the $4000 round number so we have a monthly close above
this level which will further suggest price may continue to move to the upside.
As for now, the overall trend is bullish so we just need to wait patiently for signs of a
continuation on the lower timeframe as mentioned.
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GBPNZD A Great Selling Opportunity 🤨👌Trade Proposal:
There is a probability of first tp to the proposed ( 1.91500 ) Direction line. So, Traders can set orders based on Price Action and expect to reach short-term goals.
Technical analysis:
GBPNZD is in Downtrend and It is Expected to Continue Downtrend.
Reversal Uptrend SignalsSo I thought I would explain some of my technique for trading ES Mini Futures. After a long time of trading, what I've noticed is that on an initial uptrend or downtrend, the first likely thing to occur is a reversal. I calculate a trend based on the highs and lows of the last 50 bars of an Adaptive Moving Average scheme (I used to do the math, but for the last 6 months I actually wrote it into a ToS script so I no longer have to do the math anymore). If a trend doesn't reverse, than what it does is close higher, then return to the close of the trend changing candle, before continuing on with the trend. If it immediately reverses the trending signal, then it normally returns to the beginning of the trend changing candle, before another potential go at that trend signal. Otherwise, it's a failed trend signal and it reverses until you end up see the trend change signal for the opposite direction. Basically I initially take an OPPOSITE position of whatever the trend appears to be, unless it confirms the trend is continuing.
I know, I know, it all sounds fairly confusing probably... but it has proven to be fairly effective (currently I'm at 80% accuracy on my trading log for the last 3 months). This is effective on ANY timeframe, be it 1m, 3m, 5m, 15m, 30m, 45m, 1h, 2h, 3h, 4h, 6h, 12h, D, etc. (Those are the only ones I look at).
Because of the amount of money involved in trading futures and the volatility of this current market, I've been mostly intraday trading using the technique on the 5m (most trades last about an hour'ish') but still using the longer timelines for potential indicators on reversals. Note, your reversal signals are also your EXIT points for the current trade you are in. If you are having a successful trade, and the next trend signal comes in claiming you are going to keep heading that direction, expect a bull back and I exit to take profit and reverse my position unless something tells me the current trend is actually going to continue.
If you'd like to see this in action, I marked where the 2-Hour Uptrend Signal just hit (and then there was a reversal). It then went for another shot until it hit the 3-Hour Uptrend Signal, and again there was an initial reversal. Please note, this is a 4-Hour Chart, so you'd have to bring up a 2-Hour and 3-Hour chart to see those candle signals I referenced. I suspect you'll see this in real time if you look for the 4-Hour Uptrend Signal (I believe the candle will have to CLOSE above 3815'ish' for that to occur). This occurred on the 4-Hour back when we were in the 4000-4100 land. (The Uptrend 4-Hour candle signal is the 9am EST one on 5/26/2022, and the downtrend 4-Hour candle signal was the 9am EST on 6/1/2022). You'll notice at the close of BOTH those candles, the next candle reversed, on the first candle signal it only reversed a little before continuing on the trend, and on the second it went back around the beginning of that candle twice before we started our massive downward move on June 9th.
So, all that being said, since we are currently appearing as the 3 Hour Uptrend may continue, I'd see the next key area being the 4-Hour Uptrend signal. Once that signal occurs, it will either immediately reverse, or go slightly higher before coming back briefly and continuing on the uptrend (with about 80% certainty). If the 4-Hour Uptrend continues, I'd expect a big area will be around 3906, as that is when the 12-Hour Downtrend began at 1am EST on June 10th. And remember, I said if a trend continues on it tends to return to the initial starting point before continuing, and after crossing 3906, we never had a 12-Hour candle close above 3906 before we went down more, so the pattern even though feeling so long winded now, still applies on the longer timelines.
So... there you have it. Reverse Trend Trading. I encourage you to go backwards and see how often you begin to see one of scenarios play out. You'll also want to check the next higher timeframe to see if it hit that trend signal also. Basically, I don't believe in predicting the market, as much as I believe in reacting to the market.
Safe trading, and always remember the MOST important part of any trading plan, is the risk management part. Especially when trading futures due to the significant amount of money involved. If you're interested in looking into this, PAPER TRADE it first, and then trade Micro contracts if you decide to enter the futures market first also.
Disclaimer - This is simply my trading technique, and DOES NOT constitute any official trading or financial advice and any trading you perform on this technique you assume for responsibility and all the risk involved.
Shorting US30 - using pullback strategy in TMA indicator The major trend is Downside in US30
So we are waiting for price to come to the top bands in M15 chart
(30400 can be zone to SELL the US30)
Good example of trading based on pullback strategy with TMA Reversal Channel Indicator.
GBP/USD Order Block Zone On The Daily Time FrameHi Traders,
Looking at GBP/USD on the Daily today.
Notice the descending trend line since the beginning of the year.
We haven’t broken through this entire year and we have been making lower lows and lower highs all this time.
This means that my overall bias on this pair is still bearish.
I have marked up an Order block zone highlighted in blue.
If we see a retrace up to that zone, I will consider going short only if my requirements with volume are met.
This requirement is that the retracing volume cannot be larger than the bearish impulsive volume that sent the price down past previous support.
If the retracement volume is larger then I will have to re-think and perhaps start looking for long setups.
Trade safe out there!
The Vortex Trader
Bitcoin At The Next Major Support LevelBitcoin has now declined 71% from the high of November 2021, almost
reaching $70,000 before moving south.
Last year’s low at $27,734 was held as support in May this year, but June’s
candle has so far penetrated this level. We could see a push up before the
end of the month and a close above this level, but for now price is trading below it.
Another major level of support is holding price up, and this level is from the high
of December 2017 at $19,666. This level held as resistance up until December
2020 during that consolidation period. It has now turned from resistance to support.
This level is also around the $20,000 round number, a psychological level of support.
This reinforces this support level as being significant, but of course, we have to wait
and see what price chooses to do next, so patience for now.
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S&P Halts At Last Year's LowIs this the major support level that stops the S&P 500 from dropping further down?
If it is, the bull trend will eventually resume, but if not, we will likely see a bear trend.
Price is now at last year’s low at $3662, which is a strong level, but we will have to
wait and see if it is strong enough to stop the 23% decline from increasing.
Other previous significant levels of support have been broken, so we need to see a
confirmation of a bullish trend continuation before jumping into long positions.
The first thing we need to see on the daily timeframe is a pattern of higher highs and
higher lows. Next, we need to see price break above resistance levels on the lower timeframes.
Once our proprietary trend filter on the daily timeframe turns green, this will be our
queue to start looking for long opportunities but only in the strongest trending stocks
forming linear trends. Until then, we will continue to see how the market plays out.
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AUDCHF I retracement and more decline!Welcome back! Here's an analysis of this pair!
**AUDCHF - Listen to video!
We recommend that you keep this pair on your watchlist and enter when the entry criteria of your strategy is met.
Please support this idea with a LIKE and COMMENT if you find it useful and Click "Follow" on our profile if you'd like these trade ideas delivered straight to your email in the future.
Thanks for your continued support!
Brian & Kenya Horton, BK Forex Academy
SQ ShortDowntrend consolidation
Next Earning 8/3/2022 Estimate 0.17
Short 82
Stop 90
Target 55 (weekly support line)
Risk management is much more important than a good entry point.
I am not a PRO trader.
In my trading plan, the Max Risk of each short term trade should be less than 1% of an account.
Buy Put Butterfly Nov P45/60/75
Limit 1.9
no Stop in option
Dollar Outlook for Week 24 -> DXY, JPY, CHF, GBPLast week I got surprised by strong USD. Not one of the expected predictions came true and therefore no trades have been taken in the $ pairs.
Last week news favored a stronger USD.
Inflation is still unexpected high despite aggressive rate hikes. It seems a 0.5 hike for the next meeting on Wednesday is already fully priced in. Further hikes in the coming months are likely.
On the other hand the markets seem very fragile and therefore an aggressive stance from the FED and other central banks might risk a further slowdown and even more volatility in the markets.
Therefore I still believe the strong $ is only temporary.
→ All the current Outlooks are based on MT weakening of the USD.
→ Outlook solely based on PA.
Wait for confirmation before entering a trade and consider FX correlation.
-------------------
Glossary:
HTF – Higher Time Frame
LTF – Lower Time Frame
MT – Medium Term
DT – Down Trend
UT – Up Trend
BO – Break- out
PA – Price Action
CS – Candle Stick
SL – Support Level
RL – Resistance Level
TC – Trend Channel
Color Code:
Blue solid line – Actual PA Structure
Blue dashed line – Legacy PA Structure
Violet dashed line – Area of Sensitivity S/R Levels
Orange dotted line – My Alarms
While Everyone is fearful I see 11 RBitcoin is now at support, even if we are going lower (which probably is where we are going) bitcoin has a great chance to bounce from here and reverse the trend to 25k maybe flirt with the 27k then down we go
S&P Having A Weak JuneThe S&P 500 was held at the $4,000 round number zonal area of support.
We did witness a little strength to the upside, but the previous support from
February 28th 2022, at $4114 turned to resistance and prevented price
from climbing higher.
Price hit this level of resistance and has since displayed weakness and an
impulsive move to the downside unfolded. Thursday's move was bearish,
and Friday opened with a gap down and closed with a big bearish candle.
We will have to see how this week pans out, but we can expect to see the
weakness continue, at least for the short term.
There is plenty of uncertainty in the markets right now, and the best position
to hold is standing aside. Opening positions only when there are clear trends
in play is the simplest way to extract profits from the markets.
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Bitcoin Breaks Multiple Support Levels!Bitcoin was held at a major support level for almost 18 months and appeared
to bounce from this level to resume the long-term uptrend.
Price dictates the next move and in this case, it decided a bounce would not
take place for now. Instead, the major consolidation support at $28,800 was
broken and so far this week, another level of support has been broken at
$25,401 which is the low of May 2022.
The markets will always surprise you, which is why it is best to stand aside
until there is a clear move in either direction. Jumping into positions prematurely
is purely guesswork.
Based on the weekly timeframe, the next major level of support is the weekly
200 simple moving average which currently stands at $22,375.
Standing aside is the best option for now as you want to preserve your capital
for when the big moves begin, which could be the upside or the downside.
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Going LONG on AUDJPYThe YEN is so weak that it needs some energy shots.
However we need to take advantage of this weakness and stick with the trend.
The pair has made a M15 pattern that is aligned with all the trends and within the H1 MA.
Looking to long at 96.30 and stops at 95.90.
Good luck!
descending triangle US30 Evening traders. As you can see we have which looks like a descending triangle pattern on the hourly chart. We have multiple touches on the resistance line and currently moving downwards back to support.
We have also had multiple touches and breaks below the 0.382 fibonacci line.
What does this all mean? Well if we can get a close below 0.382 and stay below that level then we could possibly see another drop in the market to 32500 or perhaps even further.
If you agree or have another opinion then let me know down below
cheers
shaun
