This was the first strategy that give me first steady profits. It is based on Bill Williams "Profitunity" system. I did remove all oscillators based on Moving averages and introduce RSI – the most powerful indicator on the planet. As you can see on the chart we have Alligator, Fractals and RSI. IN short: Fractal indicates Pivot Points end or beginning of individual Swings, Alligator shows changes to momentum (momentum moves first before price make any changes), and keeps us inform about swing directions (we need to stay in sync with trend and trade with trend, RSI indicates speed of momentum changes, price direction, divergences, trend directions, strong buy/sell signals.
Let’s take a look DAX chart (I trade only Currency Markets but this strategy works on all markets and all TF). Price just touch upper line of Orange Channel (longer term channel), there is Divergence between Price and Alligator Red Balance Line – indication of incoming correction to the last swing (last long four candles). RSI shows support level on 12600.00. last upper move it is not strong an enough to push price higher. We should expect correction to the down side. Last deep move on RSI shows also confirmation of continuation of upper trend. But that could change depend on French election.
cheers,
Jim Poniat
Let’s take a look DAX chart (I trade only Currency Markets but this strategy works on all markets and all TF). Price just touch upper line of Orange Channel (longer term channel), there is Divergence between Price and Alligator Red Balance Line – indication of incoming correction to the last swing (last long four candles). RSI shows support level on 12600.00. last upper move it is not strong an enough to push price higher. We should expect correction to the down side. Last deep move on RSI shows also confirmation of continuation of upper trend. But that could change depend on French election.
cheers,
Jim Poniat
Comment:
I forgot to mention that RSI setup is my idea - I call this Spectrum. Four lines shows highest point on price strongest/ weakest points of momentum. two middle line are the indication of price getting reach I call "Flip Area" where price will loose strength.
