The few people following my posts here have already understood that I like to form a trading idea based on the HTF. A Weekly chart, for example, gives me a more concise and clear picture of the technical aspects of a price prognosis. I am not searching for the perfect point of entry, and that's precisely why I rarely do a multi-timeframe analysis.
Getting into the main point of today's post, I formed a trading idea based first on the current fundamental status of the U.S. economy, and after I used the confluence of several simple and well-known technical indicators that their predictive power increases in analogy with the time frame that they are implemented and examined. As I said many times, technical analysis is the most accurate risk management tool and provides a "map" of the risk-to-reward ratio that a trading practitioner will follow as a plan.
Givens: a)RSI(14) breaks below the 50 level, b) Stochastic Oscillator (14,3,3) started to come down from above 80, b) MACD gives a sell signal, d) the QQE indicator appears weak, and e) we have a close under the 55 weeks EMA.
Lastly, the volume volatility has decreased a lot since September 2022. All those indications can't make me wait more than to proceed (again since last July) to open a short position at the S&P500 at the market upon the following week's opening. My stop loss is placed @ 4,546 units, and my exit profit @ 3,294 units of the indicator. The Reward to Risk fraction of my trade will be approximately 4.2, so for every dollar I'll risk, I expect a reward of 4.2 dollars. I am going to risk 4% of my $ 300k funded account.
Getting into the main point of today's post, I formed a trading idea based first on the current fundamental status of the U.S. economy, and after I used the confluence of several simple and well-known technical indicators that their predictive power increases in analogy with the time frame that they are implemented and examined. As I said many times, technical analysis is the most accurate risk management tool and provides a "map" of the risk-to-reward ratio that a trading practitioner will follow as a plan.
Givens: a)RSI(14) breaks below the 50 level, b) Stochastic Oscillator (14,3,3) started to come down from above 80, b) MACD gives a sell signal, d) the QQE indicator appears weak, and e) we have a close under the 55 weeks EMA.
Lastly, the volume volatility has decreased a lot since September 2022. All those indications can't make me wait more than to proceed (again since last July) to open a short position at the S&P500 at the market upon the following week's opening. My stop loss is placed @ 4,546 units, and my exit profit @ 3,294 units of the indicator. The Reward to Risk fraction of my trade will be approximately 4.2, so for every dollar I'll risk, I expect a reward of 4.2 dollars. I am going to risk 4% of my $ 300k funded account.