Post by zzamand56 on Mar 10, 2024 8:31:56 GMT
Predicting jumps and understanding their nature is important not only for short-term trading but also for long-term goals, since exactly those strong movements lead the market and provide signals. LiteFinance: SK-FX is a high success strategy. What are price jumps? What is a divergence and convergence? | Litefinance In the chart above, there are four price jumps. They appear in the deviation of the short moving average from the long one (imbalance). All jumps have the following properties: Jumps are always followed by a bouncing movement until balance is achieved; Jumps on long time frames are always more important, according to technical analysis; When the market reaches equilibrium, it results in further jumps. The market cannot stay at equilibrium for long! In total, there are two types of jumps in the market: there are “jumps against the trend” (jump 1, 2, 3) and “jumps with the new trend” (jump 4). These jumps look similar but have a fundamental difference.
The “jumps against the trend” always signal the extension of the trend; But the “jumps with the trend” signal that a new trend is beginning. LiteFinance: SK-FX is a high success strategy. What are price jumps? | Litefinance In the chart above, you can see that the jumps on the hourly chart (left) 1 and 2 are not followed by a divergence Belize Mobile Number List on the same time frame; However, there is already a bearish divergence between the tops 2-3. Despite this, the movement in the trend extended, and only 3-4 bearish divergence worked. As you can understand, it is break 4 that becomes the last moment of the uptrend, finally resulting in a change and new trend direction.
To filter the jumps and understand which ones end in a reversal and which ones don't, we need to take a look at longer time frames. Here is the 4 hour one. You can see from the chart above that jumps 1, 2, 3 did not create a divergence on the 4-hour chart. Only the last one, the fourth, triggered the reversal signal, making convergence (bearish hidden convergence) on longer time frames. We see, after the last, fourth jump, the MACD oscillator reaches its previous local high. Not the price. Furthermore, reversal jumps following a new trend are always followed by a divergence (convergence) in the oscillator on the current or longer time frame. Since the SK-FX strategy combines trend indicators and oscillators, it is very important to understand these tools and get a feel for them! It is more or less clear with trend indicators, many may still have problems with oscillators.
The “jumps against the trend” always signal the extension of the trend; But the “jumps with the trend” signal that a new trend is beginning. LiteFinance: SK-FX is a high success strategy. What are price jumps? | Litefinance In the chart above, you can see that the jumps on the hourly chart (left) 1 and 2 are not followed by a divergence Belize Mobile Number List on the same time frame; However, there is already a bearish divergence between the tops 2-3. Despite this, the movement in the trend extended, and only 3-4 bearish divergence worked. As you can understand, it is break 4 that becomes the last moment of the uptrend, finally resulting in a change and new trend direction.
To filter the jumps and understand which ones end in a reversal and which ones don't, we need to take a look at longer time frames. Here is the 4 hour one. You can see from the chart above that jumps 1, 2, 3 did not create a divergence on the 4-hour chart. Only the last one, the fourth, triggered the reversal signal, making convergence (bearish hidden convergence) on longer time frames. We see, after the last, fourth jump, the MACD oscillator reaches its previous local high. Not the price. Furthermore, reversal jumps following a new trend are always followed by a divergence (convergence) in the oscillator on the current or longer time frame. Since the SK-FX strategy combines trend indicators and oscillators, it is very important to understand these tools and get a feel for them! It is more or less clear with trend indicators, many may still have problems with oscillators.