"TREND TRADE, trade within TRADING RANGES, and also anticipates REVERSALS.
The signals are 1B, 2B and 3B patterns- signalling REJECTIONS @ KEY HOT ZONES.
PRICE/MACD DIVERGENCE is a key part of the strategy. But don’t always wait for it.
Trend begets Trading Range, and Trading Range begets Trends.
2. Clearly, we see there was an uptrend that got broken convincingly, following the Buy climax @ 1.5555.
From here, The selling seized= The BOL . The first leg up of the trading range tested the BX , and produced a Higher High major Trend reversal.
This sold heavily , but that was expected to halt around the BOL zones = The 2nd leg down.
A buy zone is clearly defined here.
3. PRICE/MACD show divergence= long
4. We have a 2B pattern here= a doji+a trend bar for confimation.
I would long @ mkt open with stop slightly below the pattern.
The context is right for long, and so, should the trade fail by this signal, I would look for the next signal to go long in this zone again.
I'm envisaging this leg producing a w/ BX = The right shoulder for a potential HEAD & SHOULDER