Just a quick comment re early potential for upside. Will update asap
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Scalping Group of timeframes These timeframes provide early indications of reversals. We can see the Green is higher than the Energy in the 12m, the Red RSI has made contact with the Green as it rises as has the Blue LSMA, in the 12m, 23m, 45m, 90m & 3h the Green is higher than the Energy indicating bullish sentiment. In the 6h although the Energy is currently higher than the Green, the Green has moved up strongly with the Energy. The Red RSI & the Blue LSMA in the 6h have also crossed bullish above 50 and as a result we can see the price action move between the Aqua/Orange upper Bollinger Bands. We can also as a result of the Blue LSMA rising above 50 see the BBs begin to expand thus providing the potential for the price action to accelerate with the BBs to the upside. I will try and provide an update for longer term TFs when I get a few..
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Just providing a quick update to include the near term group of timeframes. The Energy in the daily and 2d is marginally higher than the Green and the Red RSI is below 50 indicating bearish sentiment. However the Green is coming up strong with the Energy and the Red RSI has made contact with the Green as it rises in all timeframes in this group. The Red RSI is turning up. We need to see the Red RSI continue above 50 and the Energy to rise above the Green. There was is a downward pressure race between the Energy in the 2d and the Red RSI in the 4d. The Energy in the 2d has crossed above 50 and the Red RSI has not fallen to 50 in the 4d... ..But the Energy in the 2d has not closed above 50. If we can see it close in 1d 12h before the Red RSI in the 4d crosses below 50, (ideally we would like to see the Red RSI turn up) we could then see the conditions to potentially support a reversal to sustained upward pressure. But in order to confirm this we would need to see the Green higher than the energy in the 6h, 12h and 1d.
We also have a downward pressure race in the mid term group. When the Red RSI fell below 50 in the 3d it triggered a race. The Energy in the 3d is currently at level 50.36, it needs to close like this in just under 11 hours before the Red RSI in the 6d crosses below 50 in order for us to see the conditions to support s reversal to sustained upward pressure, we would then need to confirm this in the same way as above by seeing the Green higher than the Energy in at least the preceding 3 halved timeframes. Considering the level of the Red RSI in the 6d, in my opinion the Energy is likely to win the Race. We need to consider that the Green is about to cross below 50 in the 6d and we are at risk of the price action falling falling to the Bollinger Band basis which would by then be in the region of $109.00. I'm not saying this is going to happen but just that there is the potential. This would be unlikely to play out until the middle of Feb if at all. In fact the Energy seems to be exhasting in the 6d and the Green looks as though it wants to turn up but it's worth monitoring.
As always - this is not financial advice but just my view of current market dynamics. One has to be aware that analyses are done on the basis of what the indicators are saying at the time and things can change. It is important to always monitor the scalping group of timeframes as we will see changes propagate up from there.
Trade safe aBL
Near term group of timeframes
Mid Term group of timeframes
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Just a quick update to point out that we are seeing a bit of downward pressure in the scalping timeframes. The Energy is above the Green in the 12m and the 23m, when the Red RSI fell below 50 in the 23m a downward pressure race was triggered. In order for upward pressure to resume, we first need to see the Energy in the 23m CLOSE above 50 before the Red RSI in the 45 CROSSES below 50. If the Energy does win the race, we need to see the Green MA higher than the Energy in at least the preceding three preceding halved timeframes from the timeframe in which the race was triggered.
In the short term group of timeframes, the Green is higher than the Energy in all but the 12h. In the 90m the Red RSI has made contact with the Green as it is falling, the Green has just dropped below 50, if it closes below 50 in just under an hour we are at risk of the price action falling to the Bollinger Band basis (currently at $144.94 but rising). The Red RSI in the 3 hour has also made contact with the Green as it falls, however, as the Red RSI is above 80, we are not guarranteed to see the price action fall to the BB basis when the Green drops below 50 in this TF. In the 12h, although the Energy is above the Green, the Green has gone up strongly with the Energy and may come out to the side to allow the Energy to fall below. The Red RSI and Blue LSMA have crossed above 50 and the Red RSI has closed above 50, as a result we can see the price action sitting between the Aqua/Orange upper BBs. We are likely to see upward pressure continue in this timeframe for another 2 12 hour candles until the Energy drops below 50. This does not mean we will necessarily see a continuation of price action to the upside but we are unlikely to see the price action drop significantly during the next 24 hours.
Overall we are still bullish but we need to continue to monitor the lower timeframes for now.
These are always an excellent read trying to validate what I've been able to catch from binge watching @WyckoffMode so far!
A few questions, if you don't mind:
Despite the bullish signs I recall that that it would be preferable for the Blue LSMA to be low, around 20% or lower for safe entry to long bets. Are you more flexible with the Blue LSMA in the prerequisites when taking long positions?
Secondly does it matter which way the the Red RSI & the Blue LSMA cross above 50 to indicate bullish? What I mean is that in the 6h the Red RSI is lower and catches up the Blue LSMA which was higher. What if they were the other way around where Blue LSMA would have been lower and caught up with the Red RSI? (Not sure if technically feasible given the LSMA & RSI source data and the way they're plotted up).
And to continue on the above, do the two Red and Blue need to be coming from below 50 before they cross for it to indicate bullish? For example in the 6min chart of your image they cross while the blue has not dipped below 50 for a while.
All the best!
aBitLong
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@whatnottt, Hi you are welcome mate.
I will try and answer your questions later - super busy and home schooling son at moment - just had a break..
whatnottt
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@aBitLong, thanks for your response and no worries. Respond whenever you might find the time, I'm just getting my bearings here anyway. :)
aBitLong
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@whatnottt,
No worries - I'll make a very quick explanation but don't have much time to go into too much depth.
It is a good point you make, and I know that it is stated in David's rules - below 20 or above 80 as these indicate oversold or overbought conditions and my better apply to the lower scalping timeframes. But will also apply to higher timeframes but not exclusively. Indicators need to be interpreted as you know across timeframes and with regard to other indicators so these are not hard and fast rules. Consider that the BBs are likely to expand as the Blue LSMA crosses 50 in either direction or it reverses direction close to 50. This would then maximise our potential price movement. Imagine the Red RSI and the Blue LSMA cross above 50 together while making contact with the Green as it rises, this would be considered a premium signal as the price action is likely to go up to reside with the candle bodies for the most part between the Aqua/Orange upper BBs, accelerating the price action to the upside as the BBs expand. Remember we are working with multiple timeframes and timeframe groups so you will not get the same indicator positions in them all.
I am not aware that the order in which the cross materially affects the outcome or the quality of the signal, but I may be wrong, I do know that it can be considered a possible bullish signal in conjunction with other indicators if the Red RSI crosses above the Blue LSMA.
The Red RSI and Blue LSMA don't necessarily have to cross above 50 from below. They can change trajectory bouncing back up from the proximity of the 50 level. The affect will be the same.
The levels can and do however have an impact on the legs of the movement, so if we saw a move from 20 to 80 that would be a large move, but not predicable, particularly in the lower timeframes in which you would be likely to use it.
I hope this helps to some extent..
whatnottt
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@aBitLong, dude this is gold! Really appreciate you took the time to clarify, it really helps put the pieces together!
aBitLong
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@whatnottt, No worries, glad its helpful.
Another useful rule involving Red RSI:
If the Energy is higher than the Green and the Green crosses (particularly if it closes) above 50, price action will probably go up to the BB Basis. Depending on how high above 50 the Green rises, price action may go up to the White/Aqua upper BB.
The converse is of course also true.
There is one exception:
If the Red RSI has not closed above 20, when the Green goes up to level 50 it does not mean that the price action will go up to the BB Basis.
This demonstrates a case where the signal is better if the Red RSI is not near the extremes. So again I would probably consider the oversold/overbought conditions more in lower timeframes. This is just my observation though.
Another important consideration in relation to the position of the Red RSI:
You can see that the Red RSI has CLOSED making contact with the Green as it rises, you know that on the next candle the Energy will cross above 50 indicating a period of upward pressure, you are now considering opening a long position as soon as we close with the Energy above 50.
But you also want to get an idea of whether the period of upward pressure is going to be brief or a little more sustained. You would then look in higher timeframes...
..And this is where the Red RSI comes in again.
We know that as long as the Red RSI is above 50, upward pressure will continue until the Energy falls below 50. If the Energy is high or still rising we know it could be a while before the Energy falls.
We therefore have an idea in the timeframe in which we are opening our position how long the current move may last and that we will be trading with the trend.
You may be aware that the rule about upward pressure remaining until the Energy drops to 50 is dependent on timeframes. Every pair also has its own personality in this regard. So for example with BTC & ADA in the Weekly, we can assume upward pressure will remain as described above, until the Energy drops to 55 - 50. However in the 12 day it would be closer to level 75-70. This is based on a probability of 85%.
whatnottt
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@aBitLong, these golden nuggets that are sprinkled over 10s of hours of streams. Been trying to write them down as I go through them so having them outlined in such a clear manner is really fantastic. Some I had captured earlier, a lot I hadn't.. especially the conditional ones like the different characteristics between indicators in different time frames and how the expected levels change (55-50 vs 75-70 on energy etc.).
Read earlier you're from IT background as do I. Have you ran these any analysis on the chart raw data? Given that one can pretty easily extract csv data out of trading view? I know this is not an exact science but it feels like an interesting venue to explore especially when just getting started and haven't yet formed a 'muscle memory' on reading these signals and putting them all together.
Thinking tests like detecting situations when Red RSI and the Blue LSMA cross above 50 together while making contact with the Green as it rises and then seeing what the price action was and on which bands for the next x candles etc.
So basically quantifying the theories a bit using multiple time frames. Could be wasted effort too, but sounds tempting..
aBitLong
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@whatnottt,
Hi again mate, Yeah I think probably hundreds of hours of streams if you include the 6-14 hour livestreams..
..I've pretty much been taking notes and organising, linking and tagging etc from every video. I use OneNote - I find it helps me remember stuff if I write it down and organise it etc.. I haven't done any fancy stuff with the data - I'm struggling to find the time these days - so I'm mainly catching up with this stuff at night. I'm not sure if you can do anything useful with it but I've started having a look at automation. I use 3Commas trading platform and I've started to have a look at what's possible with their DCA bots. You have pretty much unlimited ability to configure the bots however you want, so you can set pre-start conditions, and multiple running conditions and rules based on TradingView indicators. Pretty much any rules based system can be used to control the bots, I haven't had a chance to play around yet and to look at multiple conditions from multiple timeframes but it looks quite interesting. You can also get the bots to place stop losses automatically as a percentage from other indicators such as BBs and you can as expected use these for margin trades.. I really need to seriously consider closing my business otherwise I'll never get the time to fully explore options.