It is also bounded between 0 and 100 which makes it easier to interpret. The RSI is without a doubt the most famous momentum indicator out there, and this is to be expected as it has many strengths especially in ranging markets. Having a Cipher Pattern at its D point (pending reaction) and an RSI around extremes or in divergence is a good confirmation of the trade and is a conviction enhancer. If you feel that this interests you, feel free to visit the below link, or if you prefer to buy the PDF version, you could contact me on Linkedin. It features a more complete description and addition of complex trading strategies with a Github page dedicated to the continuously updated code. I have just published a new book after the success of New Technical Indicators in Python. However, only using Harmonic Patterns on their own might not be sufficient as we will see below, they are best combined with contrarian indicators to increase the chances of a profitable trade. The reason they work has nothing to do with mystic or magic whatsoever, it is simply the fact that Fibonacci retracements are used by many traders and their visibility makes reactions more likely, thus increasing the predictive power of the patterns. The thing that works about Harmonic Patterns is that they use the confluence method, meaning that they expect reactions from clusters of certain levels defined by Fibonacci retracements. If you are still unsure of the process, here is a quick video guide, uploaded by one of the creators of Market Cipher.Harmonic Patterns are one of the powerful advanced price action techniques that are used to detect reactions. Still not sure how to set up Market Cipher?
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