So guys I started doing this new method of trading, and it's amazing because it works on the 1 minute, the 1 hour, the 4 hour, daily, monthly... You name it, it works in all scenarios and timeframes. I'm not saying you will never ever ever get stop lossed. We use ATR as our stop loss, ATR will be specific to each individual timeframe.
After doing some experimenting with multiple different trading methods, I wanted to incorporate something that was fairly easily identifiable and didn't have too many complex rules. You can use it to trade any asset. I found that it actually works real well in choppy markets, which is USUALLY not the case for most other methods. Most other trading methods rely on trending markets.
On this setup, it created a 6 to 1 risk long trade. Which means we are only risking 1 ATR unit to every 6 of profit.
What are the fundamentals of the 3 push trade?
1) Find the trading range.
-In our example, trading range low of $41.6 was used and high of $52k.
-(The "FIB CHANNEL" tool is super good at creating a trading range for you), all you really need to have is just a fib retracement from the high and low of 50%. That will show you the exactly middle of the trading range.
2) Be patient and allow the trading range to develop. If you are trading WITHIN the trading range, you are looking for price to CROSS the 50% fib and bounce at least 3 times. AFTER the third touch of the 50% fib line, you enter INTO the position of the previous high between PUSH 2 and PUSH 3 once it is crossed. Ideally the candle that crosses that previous high DOES NOT HAVE A TAIL THAT EXTENDS INTO THE 50% FIB!!! YOU WANT THE CANDLE YOU ENTER TO BE CONFIRMED!
-What do we mean when we say "candle confirmation"? That simply means that the candle opens and closes in the direction of your trade. If gong LONG above the 50% fib, the candle closes between the 50% and the top of the trading range. If going SHORT, it closes below the 50% fib and the bottom of the range.
3) BECAREFUL OF THE "FAKE PUSH":
-As you can see above, we have a trading range established. We were looking for a short position after price kept retesting the underside of the 50% retracement. We got a total of TWO drives that pushed INTO the 50% retracement.... NOTICE that the THIRD push DID NOT!!!!
-This is called a fake out, and tends to produce a VIOLENT push back to retest the TOP of the existing trading range (as in the example's case - although this is the same exact method, just the opposite, for potential long positions on a 3rd failed push on the topside). We can even fully break out above the trading range. (NOTICE HOW THE EXAMPLE RIGHT ABOVE IS ON A 2 MIN CANDLE TIMEFRAME - THIS IS THE BEAUTY OF THIS! IT WORKS ON ALL TIMEFRAMES!)
4) BONUS TRADES ON A FAKE 3RD PUSH. HIGHLY PROFITABLE:
-When the 3rd fake push makes a bottom, goes up and retraces back. BUY past the HIGH of the first push (red dash trendline).
Comment:
This next example is RIOT. We didn't even make a second or third push to the median in our yellow trading range. it created a new bottom below the bottom of the yellow trading range, boom! Went higher. Made a swing low and we bought the entry past the first swing high!
Comment:
This is what to look for on BTC: