mntiwana wrote: Sat Jun 10, 2017 8:24 pm
Hi jerrysb
Can you illustrate with pictures what you explained in above lines,may be it help traders to better understand and exercise,after all we gathered here to share and contribute our part of knowledge - same thing doing our kind experts too
Hi,
Well it's more of an art that a science. In fact that's why I am looking for indicators to make it rule-based.
What I do is basically a mean-reversion scalping strategy on the 15 min timeframe.
- I use the recursive stochastics for a "cyclical" view - i.e. what was supposed to happen if price were cyclical. I assume there is a 20 bar cycle - William Bressert said so!
- I use the DSS r-squared for the actual momentum view - what actually is happening with orderflow.
When they agree - price has a chance to bounce from the S/R or supply and demand zone.
When they disagree - a new S/R or supply demand zone has a chance to form that will be a point of entry later when tested.
To identify S/R or S/D zones I look in the past - if cyclical stochastics said down but price went up then there are strong bids there so I can scalp the bounce or if price should break through - bids will flip to offers and support will become resistance.
I don't care much how I draw my S/R lines or S/D zones - don't think there is a "correct" way of doing so. I just use the closest round numbers to trade off.
Here is a pic from the recent euro price action.
