Link potential for drop in price (David M. Ward method)
I will type out the explanation in the description to avoid the chart being filled with text bubbles. The first chart gives us the short term trend. The second chart is where we look for entry.
The numbers refer to the number labels in the chart (1 and 2)
1. We are watching the energy in the 24h time frame as the red rsi has closed above 50.
a)notice now that the energy has crossed below the 50% level we have a chance for downward movement.
b)also notice how the peak of the white energy was significantly higher than the peak of the green line. This also gives the signal to short
2. The red rsi has not crossed the 50% level in the higher 2 day time frame giving us a better chance for the downward price movement indicated in the 24h time frame
The numbers refer to the number labels in the chart (1 and 2)
1. We are watching the energy in the 24h time frame as the red rsi has closed above 50.
a)notice now that the energy has crossed below the 50% level we have a chance for downward movement.
b)also notice how the peak of the white energy was significantly higher than the peak of the green line. This also gives the signal to short
2. The red rsi has not crossed the 50% level in the higher 2 day time frame giving us a better chance for the downward price movement indicated in the 24h time frame
Notice how in the 90m and 3h time frames the peak of the white energy is significantly higher than the peak of the green line with the energy being higher in the 6h as well. This supports our bearish intentions.
As the green line has just made contact with the red RSI as the green line is coming down. This is where we enter our short.
The 3h is supportive of this idea as it seems that the energy has exhausted on the upside and is falling meaning the green line will also fall to make contact with the red line.
The energy in the 6h and 12h has already exhausted and the green line is making contact with the red RSI while the green line is going up but since the red RSI has closed above 56 in the 24h time frame we are ignoring the white energy in the lower time frames.
Now I am not 100% sure what the green line making contact with the red in the 6h entails.... it may simply be noise but I will let the originator of this method come in to comment on that.
Thanks for taking the time to read my first published idea!
(if you are wondering what the indicators are look to the user on this site www.tradingview.com/u/WyckoffMode/