Let's keep it plain and simple here :
First of all , i went to the settings of this indicator ( on TV it's called VuManChu Cypher B + divergences ) and i got rid of the Vwap and also the stoch RSI.
I would personally recommend using the standard RSI indicator.
Now we have a clean indicator showing us the money flow ( green + red clouds ) and the momentum ( blue waves ).
So. How do we use this indicator? For this strategy we will combine it with the 50 and 200 EMA .
There are 4 rules to the game, here they are :
WE ONLY TAKE LONGS WHEN:
1. Price is above 200 EMA
2. Price has pulled back down to the 50 EMA
3. Money flow is positive ( green cloud )
4. Blue wave is below the 0-line
WE ONLY TAKE SHORTS WHEN:
1. Price is below 200 EMA
2. Price pulled back up to 50 EMA
3. Money flow is negative ( red cloud )
4. Blue wave is above the 0-line
As you can see , just 4 simple rules...
So you want to take a trade? All 4 conditions are met?
Time to find an entry !
How? Very simple :
When you look a bit closer you can see there are actually 2 blue waves ( a lighter blue one and a darker blue one).
So, when you want to enter a long, you simply wait for the lighter blue wave to cross back over the darker one. This event will be marked with a green dot appearing on the wave.
When you want to enter a short , same thing applies only a red dot will appear on the blue wave.
Don't forget to place stop losses !!
That's basically it, i will add pictures of some things later today to maybe visualise it better.
Happy Trading !
First of all , i went to the settings of this indicator ( on TV it's called VuManChu Cypher B + divergences ) and i got rid of the Vwap and also the stoch RSI.
I would personally recommend using the standard RSI indicator.
Now we have a clean indicator showing us the money flow ( green + red clouds ) and the momentum ( blue waves ).
So. How do we use this indicator? For this strategy we will combine it with the 50 and 200 EMA .
There are 4 rules to the game, here they are :
WE ONLY TAKE LONGS WHEN:
1. Price is above 200 EMA
2. Price has pulled back down to the 50 EMA
3. Money flow is positive ( green cloud )
4. Blue wave is below the 0-line
WE ONLY TAKE SHORTS WHEN:
1. Price is below 200 EMA
2. Price pulled back up to 50 EMA
3. Money flow is negative ( red cloud )
4. Blue wave is above the 0-line
As you can see , just 4 simple rules...
So you want to take a trade? All 4 conditions are met?
Time to find an entry !
How? Very simple :
When you look a bit closer you can see there are actually 2 blue waves ( a lighter blue one and a darker blue one).
So, when you want to enter a long, you simply wait for the lighter blue wave to cross back over the darker one. This event will be marked with a green dot appearing on the wave.
When you want to enter a short , same thing applies only a red dot will appear on the blue wave.
Don't forget to place stop losses !!
That's basically it, i will add pictures of some things later today to maybe visualise it better.
Happy Trading !