For years, I've been focused primarily on support and resistance , supply and demand , and chart patterns, and it's been profitable, but over the last few months I've been really inspired by traders using Digital Signal Processing as well as divergence and linear regression in their strategies. I've been looking to work off some of the concepts explored by groups like TradeATS, as well as Robot Wealth (no advertisement I've just been inspired by their work), and I'm going to be moving more into that territory going forward. So I'll be relying less on spotting supply and demand zones (sort of) and chart patterns and more focused market cycles; using DSP to lock on to shorter wavelengths, especially in areas where my divergence fractals are piling up one after the other; drawing regression lines through those consolidation periods and using them as a my "t" axis; then, only trading once price swings reach a lower wavelength. When I get divergence signals above the t line, and above consolidation, I'll look to short the market, vice-versa when price is below t. I'm still working out how to deal with (confirm) rejections above and below the t axis, but this is where I'm headed.
I once I started recognizing that consolidation doesn't just happen "sideways" and can also happen at an angle I was able to spot these cycles a lot easier by eye. The idea that, even while trending, price still oscillates around a fixed line is really promising, and I'm hoping it's something I can exploit in the future. I'm definitely going to be working on some indicators that can track these cycles as well, so be on the lookout for that. I'm pretty excited with this new direction and if you're interested in seeing how things develop, give me a follow because I'll be posting all about it. I highlighted two examples within the last week of the patterns I'm looking for. We're looking at about 70-100+ pips per swing! I'd take half of that, honestly.
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Notice how these patterns get more and more volatile as time goes on! Even If you want to wait for confirmation of the pattern there's no real drawback to waiting, so long as you're in by the biggest move. It pays to be patient.
Nice work. Could you share your settings? Id like to check it out.
NeoDaNomad
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@Meshuggatrade, The only indicators I use are my Divergence Fractals as well as my %K, The rest I'm doing by hand. I'm working on another indicator that can spot the consolidation zones for me and draw regression trend lines through them, be for now I just do that myself. I'll make a video going in depth about it at some point, so you can see what I'm talking about. It's loosely based off of the way TradeATS teaches to draw supply and demand zones. But theirs aren't at an angle, there's also a couple price actions that need to happen to confirm my trades. Check out my last post
I traded this strategy live for the first time today, and took close to 50 pips on EURUSD. I was in short this morning before the 70 pip breakout that happened, but I took profit before the move was done, I timed the reversal perfectly, but fell asleep and woke up with another 15 pips in profit. I could have taken close to 30 pips on top of that but I wasn't awake to take profit manually. It works!