Sharing a new piece of TA: the chuvashov fork
References to: www.mql5.com/en/articles/1352
my take is as follows:
Step 1: find price in a primary uptrend and mark it with a trend-line. marked out here is the uptrend following hourly candle closes.
Step 2: on the break of the primary uptrend, observe for a definitive new swing low. mark the new secondary trend-line (note: to qualify as a chuvashov's fork, the secondary trend-line has to be in a uptrend, albeit less steep).
Step 3: price breaks below the secondary trend-line and triggers a short signal. the trade idea below shorts at the break, and uses the recent swing high + an approximate average true range, for a stop-loss.
interim note of caution: in this case, BTC broke up from the location of the short and retested the secondary trend-line. working with trend-lines for awhile now, i've noted this is a regular occurrence that trend line traders should be prepared for. in this case, placement of the stop-loss would have made or broken the trade.
Step 4: the strategy shown below chooses to place the stop at the recent swing high, with a buffer room of 1-2% (alternatively use the daily average true range (ATR) for a more statistical measure). the sell order shown assumes the practice of laddered sells placed up into the area of idea invalidation.
Step 5: Profit. price came pretty close and got stopped by the orange hourly order block.
Conclusion: the trade made it home in the end after a brief period of consolidation. This final chart summarizes the two sell set-up of the trade, and explores an additional technique of stop placement for the visually inclined: double the most recent swing high's wick's length (as proxy for volatility).
Congratulations, you have now learned how to trade the 'Chuvashov's fork' set-up utilizing classical trend-lines.
Here's a quick recap in chart form:
In closing: I hope this piece proved useful in broadening your understanding of TA trade set-ups made possible by classical trend-lines.
Feel free to shoot any queries you might still have via mail or DMs through social media or messaging platforms.
Signing off for now,
@ZonedOutDad
References to: www.mql5.com/en/articles/1352
my take is as follows:
Step 1: find price in a primary uptrend and mark it with a trend-line. marked out here is the uptrend following hourly candle closes.
Step 2: on the break of the primary uptrend, observe for a definitive new swing low. mark the new secondary trend-line (note: to qualify as a chuvashov's fork, the secondary trend-line has to be in a uptrend, albeit less steep).
Step 3: price breaks below the secondary trend-line and triggers a short signal. the trade idea below shorts at the break, and uses the recent swing high + an approximate average true range, for a stop-loss.
interim note of caution: in this case, BTC broke up from the location of the short and retested the secondary trend-line. working with trend-lines for awhile now, i've noted this is a regular occurrence that trend line traders should be prepared for. in this case, placement of the stop-loss would have made or broken the trade.
Step 4: the strategy shown below chooses to place the stop at the recent swing high, with a buffer room of 1-2% (alternatively use the daily average true range (ATR) for a more statistical measure). the sell order shown assumes the practice of laddered sells placed up into the area of idea invalidation.
Step 5: Profit. price came pretty close and got stopped by the orange hourly order block.
Conclusion: the trade made it home in the end after a brief period of consolidation. This final chart summarizes the two sell set-up of the trade, and explores an additional technique of stop placement for the visually inclined: double the most recent swing high's wick's length (as proxy for volatility).
Congratulations, you have now learned how to trade the 'Chuvashov's fork' set-up utilizing classical trend-lines.
Here's a quick recap in chart form:
In closing: I hope this piece proved useful in broadening your understanding of TA trade set-ups made possible by classical trend-lines.
Feel free to shoot any queries you might still have via mail or DMs through social media or messaging platforms.
Signing off for now,
@ZonedOutDad