Bettina!Bettina wrote:2 nice DA trades on EU, S1 with +10.3 and S2 with 6.2. Exited the second one a bit early, but stress free.
Now since Immy has mentioned it himself in his journal, I can also name my two additional histogramms in the M1 chart : they're nothing else than eWaves of M5 and M15, so nothing new at all, just a little additional visual help.
But here, DAs are also wonderful
Bettina
Indeed your two histograms and the DA's are based on the similar concept. What we like is:
- AIMS Gators open on two higher time frames, (or at least on one step higher time frame = SA Single red/blue arrow)
Other way of looking at it is
- AIMS Wave/eWaves Green for longs and red for shorts on two higher time frames, or at least one as above.
We know that very well that Trading is a game of probabilities. Trading requires an edge. An edge is nothing but a higher probability of the occurrence of an event.
Trading is a Pattern Recognition Excercise. We know that the whole universe is made of patterns and those patterns are recurring, repeating in similar yet not totally identical patterns.
The Setup is a Pattern, a Picture that "Indicates" likelihood of price going either up or down.
The Setup "Indicates" to that higher probability of the occurrence of that event.
That event is our speculation of a price going in a certain direction.
Now the motto is :
"Higher Probability Setups (Events) are Breakout in the direction of Higher Time Frame Trends".
(Break Outs are defined as: when price stays between a certain range (upper and lower levels) creating a horizontal tunnel, the breakout of this range of upper and lower price levels, almost always shown as price stuck within tight horizontal "rectangular boxes". this is breakout. When this break out is timed in the direction of the higher time frames we get alerted with a DA, telling us that there may be a Setup 1 that is in line with the direction of the trend (i.e. Gator's Mouth and/or AIMS Wave crossed on correct side of the zero line) on either 1 or 2 higher time frames.
But then as always, there is a catch. Just like every apple is not the same or may be not as good as the other even if pick off the same tree. There might be some with parasites.
A DA is not always right. You Need to Filter the BAD Apples
In the picture below price is stuck within sideways range. The DA's indicate that higher time frames have either
Three Stages of a Wave: Life Cycle of a Wave
We trades Waves Right? We all know that price moves in waves. Each kind of wave has a start and an end. Following is a 3 stage life-cycle of a wave.
a. AIMS Gator: you'd see the wave in 3 stages
Stage 1. Sleeping Gator with its mouth tightly
Stage 2. Open Gator from freshly open to midway.
Stage 3. Past midway the gator starts to close its mouth.
b. AIMS Wave: you'd see the wave in 3 stages.
Stage 1. Wave close to its ZL
Stage 2. Wave bars going bigger and momentum increasing light green for up and red for down
Stage 3. AIMS Wave now changing colour and diverging and coming back to zero line.
Picture Shows the 3 Stage Life Cycle of a Trend What Look for on Higher Time Frames to Filter the Bad Apples
Stage 1: Price has recently started Trending in that direction. Price may have broken out of range and now retraced a bit.
Stage 2: Price is nicely trending may be between start to midway. (Look for Principle C. a certain lower time frame may show a 4th wave during PC on current time frame confirming midway of trend)
Stage 3. Price has trended for quite some time and may be at the end of the wave cycle.
Picture one, shows, H1 DA showing H4 and D1 are trending or have shown trend direction.
Picture two, show H4 and D1, As Step 2, we must check where are we in the wave. Picture 3, shows examples of Setups when Wave on higher Time Frames are around its end, losing momentum, here is the term momentum again. And how do you find the momentum, you find it 2 ways. Look at eWave/AIMS Wave or Look at how long has the gator been awake? Picture 4. in this example you'd see that the later we are in the trend of a higher time frame the lower the probability of successful breakout. But even if you had taken the second late DA, hoping to catch a further 5th down, you'd have exited with a minor loss. Why? because S1 setup itself is also a higher probability and low costing setup.
(hug)
