adaseb wrote:How do you label the X's and Y's?
Do they alternate when the candle stick color is the same. Such as when price was headed down for a few days on the daily, you had X then Y then X then Y.
I am confused how you labeled the X and Y during that short uptrend from Dec 29th.
Do you start with an X and if the following candlestick closes higher/lower than the preceeding then that is label Y unless the candlestick color is the same color as the preceding candlestick?MightyOne wrote:aliassmith wrote:MightyOne wrote:aliassmith wrote:EUR/USD long
Exited early because of double top areas are normally reversals points
when I try to trade the break out
I do not understand your logic.
If a double top, according to your analysis, is a sign of a possible reversal then why go long at all?
If you do defy that analysis (because you are using another?) and go long then for what reason are you selling out early?
The reason cannot be the double top that you disregarded in the first place.
I have noticed that after the MoMo candle the price would go only to
the extreme of the MoMo candle then reverse. I have been "tricked"
a few times in the recent past with the false breakouts.
I felt there was still ample pips to be had before the reversal.
Bodies show the way...
Momo should unfold in an X-Y-X-Y pattern on some level...
Wicks show the way not (possible reversal) when, after momo, there is a breakout and price fails to close beyond the extreme (hedge).
I think that you may be using momo at the most basic level and on small charts (sub 4H charts) where this type of analysis begins to lose value.
If you did not have a trading account would you mentally exit for 19 pips or would you find some technical reason to exit?
How you would trade with paper charts and a pencil is how you should trade live.
They should alternate...
Price Reaching: a slow upwards move with just enough momentum to satisfy short orders and vise versa.
X-X-Y is one of the price reaching patterns.
I forget when I talked about this, I believe it is somewhere in the NLA thread.
There are always more details that I can never get around to discussing because few if any understand the basics (also the reason I am not worried about sharing information )
You can think of the X in XYXY as giving traders just enough time to enter against the current without slaying the momentum.