You can't just use to Trade and Earn Money as you need to confirm the Break Out Signal that you get after a Squeeze.
Here are some tips how to confirm that:
1. Always looks for Squeezes as you will find Price Break Outs most of the times
2. Use to confirm the Price Break Out
3. Make sure is not Overbought/Oversold to have a Major Price Break Out
4. Look for Width to see whether its Rising as well
5. When there's a Major Price Break out it will go on for 1 -3hrs so you can take multiple entry points to Maximize your profits
6. Always check the levels as there's possibility of the Price reversing the other way
7. I would also recommend to check the investing.com and look for Strong Buy/Sell Signal before you enter your Trade
8. There will be fake break outs where the price go the otherway
9. You can have stop losses and enter the Trades on the otherway if there's a fake breakout
Few other Tips to Enhance the above:
1. Use default to reconfirm the Trend Direction (Thanks for the Idea from HamzaLeith)
2. Check the Direction of the Upper/Lower Bands.
For reversal's and continuations (opposite is true for reversals or continuations)
1.) Price approaches the Buy Zone and the upper and lower bands remain flat. Reversal - Likely a sharp reversal to the lower band. Because both bands are flat this will likely be short lived.
2.) Price approaches the Buy Zone and the upper band goes up and the lower band is flat or moving up slightly. Continuation - Price will likely continue up slowly for a time.
3.) Price approaches the Buy Zone and the upper band goes up and the lower band goes down. Continuation - Price will likely move up fast and furious. This is the best continuation pattern for the bands. This is a rapid expansion of . You will experience "fake out's" sometimes but most of the time this set-up will produce some good profits when executed properly.
4.) Price approaches the Buy Zone and the upper and lower bands both go down. - Reversal - This is likely to result in a reversal
Summary: Use / Width & Indicators to Confirm the Signal
Hope this Helps Anyone who like to maximize the profits
If anyone can Contribute their ideas to enhance this it will help anyone who is interested with this Strategy I guess.
I'm Using this example to Discuss this HeadFake:
As you can see there was a downtrend to start with which didnt last long and then there was a long running uptrend.Most importantly I check Trend Angle of the 20 Period Simple Moving Average (20SMA) with MACD and this is what i check for the Trend Angle and MACD:
It is very important to zoom into the correct time frame to check the Angle.(Check my screenshot)
I'm doing 30min Trades for Breakouts so that I zoom the Chart to 30mins (Using Mouse Scroll) to have 30min time intervals on the bottom of the chart so that the Angle is accurate for the Trade that I'm doing
For Breakouts (Uptrends) I check to make sure that MACD blue line is not crossed under red line so that the Trend can reverse downwards even the Angle is over 20degrees. If the MACD blue line is over Redline and the Angle is over 20degrees then i BUY.I do Opposite for Breakdowns (Downtrends)
Here's more detailed explanation using the Example:
1. BREAKDOWN - DOWNWARD TREND
- I checked the Trend angle but it's not over 20degress so I ignore that.
- I kept monitoring the Angle to see whether it goes over 20deg but it doesn't
- Ended up with a Headfake and Trend Reverse the otherway
2. BREAKOUT - UPWARD TREND
- I checked the Trend angle but i wait until it's over 20degrees.
- Price went over 20 degrees and I checked the MACD and Blue line is over Red line
- I wait until the Price come down to Upper Bollinger Band with Stard Deviation 1
which is the lowest position that I can take and then I buy for 30mins
- I wait for more price touches Upper Bollinger Band with Standard Deviation 1
- While the Angle is still over 20degress and MACD Blue line crossed Red line I BUY again
This is not that recommended but this is my last BUY of this Uptrend
- As soon as Angle goes below 20degrees with the MACD Blue crossed below Red Price Reverse
- After the MACD blue line cross down the Red line it's not that safe to BUY if
the Angle is less than 20degrees. Check the Chart below:
- Zoom the Chart to see the correct Time Intervals on the bottom before checking Angle
- Keep checking the Trend Angle and dont Trade until the Angle is 20Degrees
- Trade until when the MACD blue line is not crossed under Red line (For Uptrend)
- You can take a risk to have your Last Trade is when the Trend Angle is still above
20Degrees but MACD Blue line Crossed the Red line for Uptrend of course (Opposite for Downtrend)