Linear Slopes to Trigger Signals [Short on NZDUSD]
Full disclosure i'm a newbie chartist and trader., and i'd love input and ideas;
Now to my set up.. i'm a big fan of Linear regression, and as such this chart is plagued with it.
I've overlayed multiple LRS (linear regression slopes) over my Stochastic chart, in order to see the trending direction of the price action (through best fit).
Using it as a dynamic Resistance and Support for each time-interval. I'm able to find trigger points for BUY and SELL according to a convergence of my SLR's and the current price action.
In the chart, I've marked previous areas that trigger a "signal" for me. As you can see, when we have convergence of SLRs on the bottom (considered my Dynamic Support) and Stochastic is < 20 % and coming up, It acts as a buy signal. If the SLR's remain in the support position, (and Stochastics remains above them) when we have any correction and Stochastics points up, we may enter a new Buy order. (See the 3rd "Buy" Marker)
For the Sell Signal;
> We have hit a Static Resistance
> Spotted; Divergence on Stochastics + RSI (RSI is from Phi-Deltalytics, Link below)
> Dynamic SLR's have now entered a Resistance position, with the Stochastics' now below (I consider this a strong bearish signal).
Note: If you look closely, you'll see a green SLR, this is a fast moving SLR and allows me to estimate direction of price action, in order to enter trades before breakouts.
the first buy signal I've marked would not meet my entry conditions if this were a factor and poses more risk, however, being above my Dynamic Support, I'd enter here with a tight SL.
The other 2 buy signals, met this condition, the direction is strong and upward. and allows me to enter trades with more confidence.
extra note: I use the Linear regression tool that provides me the Pearson's R^2. the way I use this tool is by considering any price action with an R^2 > 80% as consolidation (regardless of direction). To me, I see tight price movement, and an opportunity to capitalise on a well timed breakout. The R^2 for this example it is >80 and being on the resistance tells me that this price action can breakout of the current range soon.
Phi-Deltalytics' RSI tool:
Thanks for reading, would really love to get some feedback and thoughts on this method, i'm currently tweaking and many hours of back testing.
Now to my set up.. i'm a big fan of Linear regression, and as such this chart is plagued with it.
I've overlayed multiple LRS (linear regression slopes) over my Stochastic chart, in order to see the trending direction of the price action (through best fit).
Using it as a dynamic Resistance and Support for each time-interval. I'm able to find trigger points for BUY and SELL according to a convergence of my SLR's and the current price action.
In the chart, I've marked previous areas that trigger a "signal" for me. As you can see, when we have convergence of SLRs on the bottom (considered my Dynamic Support) and Stochastic is < 20 % and coming up, It acts as a buy signal. If the SLR's remain in the support position, (and Stochastics remains above them) when we have any correction and Stochastics points up, we may enter a new Buy order. (See the 3rd "Buy" Marker)
For the Sell Signal;
> We have hit a Static Resistance
> Spotted; Divergence on Stochastics + RSI (RSI is from Phi-Deltalytics, Link below)
> Dynamic SLR's have now entered a Resistance position, with the Stochastics' now below (I consider this a strong bearish signal).
Note: If you look closely, you'll see a green SLR, this is a fast moving SLR and allows me to estimate direction of price action, in order to enter trades before breakouts.
the first buy signal I've marked would not meet my entry conditions if this were a factor and poses more risk, however, being above my Dynamic Support, I'd enter here with a tight SL.
The other 2 buy signals, met this condition, the direction is strong and upward. and allows me to enter trades with more confidence.
extra note: I use the Linear regression tool that provides me the Pearson's R^2. the way I use this tool is by considering any price action with an R^2 > 80% as consolidation (regardless of direction). To me, I see tight price movement, and an opportunity to capitalise on a well timed breakout. The R^2 for this example it is >80 and being on the resistance tells me that this price action can breakout of the current range soon.
Phi-Deltalytics' RSI tool:
Thanks for reading, would really love to get some feedback and thoughts on this method, i'm currently tweaking and many hours of back testing.