s4jikian wrote: Wed Jan 26, 2022 2:34 am
That’s why xard said to wait till the second dots.. anyway let me try to explain my take on why those trades are valid.
Let’s break it down to a couple parts..
Part 1:
So, the big semafor is on the place where you put that yellow arrow. At this point in time, the big semafor just says “hey price might go up now” and that’s all. However, if you take PA into consideration, you can see that previous semafors (circled in yellow) making lower lows and lower highs, and therefore I would have taken the sell trade too.
Part 2:
Now moving on to second part. If the big semafor was at the first yellow arrow, it WILL continue to repaint once the price has crossed below the yellow line I highlighted. However, just as above reason, the PA is still making lower lows and lower highs, and I would have taken this trade as well. Why? Price tries to break the daily open line, and got rejected off it nicely with a large down candle just after the red semafor, then continuing its downtrend. Also, take a look the the blue candles.. they have long top wicks which shows that the sellers are still going strong, stopping price from going up.
Part 3:
Now, at this point the big semafor has already repainted many times, and I hope the above explanation helps you to understand it. At this point, I personally will stop taking any trades until something is confirmed by either a breakout or any other PA stuff. The reason being price has formed a double top (highlighted line) which states that’s a decent resistance level. Just look at how everytime it touches it, it just gets rejected off with a big fat down candle.
Anyhow this is just my take on how this system works, and that’s why I mentioned previously not to use any semafors as signals. Instead, use them with other PA and trend confirmation stuff before entering. Also, the posts above this has mentioned a simulator.. maybe you can use that to help you understand better how this entire system works. Took me awhile too but still manage to get it.
This system shows you the road.. you’ll need to find a good entry/exit strategy to make this work right. I’ll suggest to start with the RSIMA on v13..
As of Right now I’m still working on my exit strategy….
Edit : I don’t know how xard manages to pull off exiting at the green dots on a sell trade.. but from a guess standpoint I think he’ll bail once the subwindow line crosses up.. or something like that
Hope this helps