“Call” Option: If an hourly candle touches your top line on the hourly time-span and the Stochastic isn’t overbought you scroll right down to the M15 time-span then wait a little for a candle to close up above the line. The closing of this M15 candle is where you make an entry.
“Put” Option: If a hourly candle touches your lower line on the hourly time-span and the Stochastic isn’t oversold you scroll right down to the M15 time-frame and then wait for a candle to shut below the line. The closing of this M15 candle is the entry point.
Disadvantages of The Four Candles Technique
This approach is not suitable for beginners who do not have candlestick know-how and can’t sketch decent support and resistance ranges. Another issue is the fact that there is no idea about expiries, or whether or not it performs as well in greater or lesser time frames! This strategy is also time bound, suppose the first four candles of the day end up being passed? What does one do then? Wait for the next day?
Advantages of The Four Candles Technique
I consider this technique to be remarkable for several reasons. First, the assessment of the chart by making use of candlesticks doesn’t just depend on indicators. Second, it uses only one indicator that is the Stochastic Oscillator, a powerful and reliable tool. Next, it confirms breakouts plus keeps you in the direction of the trend by making use of more than just a single time frame. Fourth, you have an excellent chance of avoiding erroneous breakouts thereby helping you minimize your losses.
The Revolt Strategy
What does “The Revolt” Mean?
The revolt is a technique that attempts to pinpoint exhaustion within a trend. The blue line primarily represents the strength of buyers, while the red line represents the strength of sellers. When purchasers are capable of making new highs, the blue line will go up, and the red line will drop. The blue line rising indicates there is a lot of buyer power and purchasers are in control, though at what point have the buyers gone too deep and spent their momentum? It is in such instances that the sellers would revolt and take back the strength. Whenever the sellers are able to make new lows, the red line will go up, and the blue line will drop.
The Revolt is a technique that attempts to pinpoint exhaustion within a trend. The blue line rising indicates there is a lot of buyer power and purchasers are in control, though at what point have the buyers gone too deep and spent their momentum? It is in such instances that the sellers would revolt and take back the strength.
How the Revolt Technique Works
This technique is not time-frame reliant but bears a fairly short to medium expiry time zone relative to the timeframe being observed. Should you be looking at five minute periods of time, expect the move to be made in an hour or two. Should you be looking at daily periods, the move may take a month or so.
We’re making an attempt to pinpoint extreme power from one side of the market through the use of a fourteen period ADX as well as its component DI’s. In the event that the buyers happen to be extremely powerful, then it is assumed that the sellers were essentially quite weak. Therefore, this will be represented by the redline falling below ten. When the blue line drops below ten, we consider this to be a signal of buyer weakness. We then will enter a “call” trade when the buyers are at their very weakest as this will be the moment for the buyers to revolt. And of course, a “put” trade will be entered when the sellers are at their weakest.
The signal for DI below level ten will be established by the Stochastic Oscillator (5,3,3). We are expecting a crossover in the overbought zone (80+) and the oversold zone (20-) at the same time since the DI’s are pointing to extreme weakness. Such will be the spots on the market in which revolt is most likely to take place.
The Cons of The Revolt Technique
This approach just does not work in some market environments. Particularly in trending markets. The seller weakness that ought to be a “put” signal could be more like a trick if the signal presents itself in an uptrend market situation. The “put” alert is only going to exist as a result of some momentary dip in the trend that will most likely reverse back into the uptrend. I would advise trading this system in ranging markets only, where you can define the way you see fit. I am not saying it is not a good idea to use this in trending areas; I am merely saying it’s more dangerous, therefore you should set the expirations on your trades to much shorter time frames.
The Pros of The Revolt Strategy
The system is advantageous for the reason that it uses easy yet practical reasoning as the principle for its trades. We put “call” trades at the time the sellers tend to have moved too far in their selling spree and the market has become oversold. We put “put” trades whenever the market is overbought. The simplicity allows traders to render quick decisions about their signals without getting a bunch of complex and confusing information. Just two indicators, that is it. We are simply subscribing to the revolution in instances of surplus.