Bitcoin Technical Analysis - Placing a trade based on ADX trend
This 4hr chart clearly shows why being preemptive can cost opportunity for profit.
The correct decision in this case was to wait for the divergence to form on the dotted line
Had the green (D+) bounced positive and the (D-) bounced negative the price would have been positive.
What actually happened was
1. that the D+ crossed the dotted line (Bounce Line) and went negative
2. that the D- crossed the dotted line (Bounce Line) and went positive
3. ADx also turned positive
These three indicators indicated the following was happening
D- gathered srength over D+ with the ADx line showing how quickly the D- gained momentunm/strength
The correct decision in this case was to wait for the divergence to form on the dotted line
Had the green (D+) bounced positive and the (D-) bounced negative the price would have been positive.
What actually happened was
1. that the D+ crossed the dotted line (Bounce Line) and went negative
2. that the D- crossed the dotted line (Bounce Line) and went positive
3. ADx also turned positive
These three indicators indicated the following was happening
D- gathered srength over D+ with the ADx line showing how quickly the D- gained momentunm/strength
Comment:
It took 3 days for the power play to break through the 5% gain