![]() There is a good example in the chart above. Although such a sell signal cannot be as strong, it can be a confirmation for bearish signals of other indicators. I should note that when a buy signal is not confirmed, that is, the five conditions above are not met, there is still a signal, but it is a sell signal. Therefore, one could have safely entered a buy trade at the current level when the new bar of June 14 opened (I marked it with a red cross in the chart).Īs we already know, this signal reached the target and provided the opportunity to gain on the BTCUSD movement up to the high at 14 000 USD. Furthermore, when the indicator exited the overbought zone, the price had been already trading above all the previous bars’ close levels. The asset is trading higher than the previous bars’ close levels.The next bar’s open following the reversal bar is equal to the previous bar’s close (there are no gaps).The close of the bar below the arrow is lower than the previous bar’s open and close (blue dots are far lower than the previous bar).The bar’s close under the red arrow is lower than the previous bar’s low (blue dots are above than the red dotted line).The DeMarker I indicator was below the level of 40 for not more than 13 bars - in our case it was only 5 days.Now, we can analyze the continuation pattern based on the above conditions. Immediately after that, we look for a point where the bar features the low before price exits the oversold zone.įinally, when the price went beyond the oversold zone on June 13, we can easily identify the low in the period when the ticker had been below 40, according to TD DeMarker indicator I. Afterwards, the price rolled down below 40 and the indicator entered the oversold zone. ![]() It is clear from the above chart that the BTCUSD was in the overbought zone (above 60) from the start till the end of May.
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