Hi Jocelyn, this piece of write up is very informative and you won't believe how it has helped me.
great stuff, glad you managed to extract something positive from it!!
i will like to know, how do you guage if the momentum is weakening, u know, sometimes you see a trough violated only for price to swing back and obey it
It will usually tell me by way of the price bar formations & the strength/weakness of their ability to maintain a fluid, solid pattern.
Eventually, after a run up or down the ladder, price will begin to ease off & begin morphing into a consolidation or ranging phase, yeah? The range of the individual bars will generally contract & a series of small, neutral (doji's...spinning tops etc) range barswill begin surfacing.
Depending on which timeframe you’re observing, this type of price activity will either (eventually) continue in it’s original direction or reverse & violate the previous peak-trough behaviour patterns.
You have to appreciate that quite often price will obey the trend mechanism perfectly, printing neatly stacked peak-trough steps in a well organized manner. Other times it will behave with erratic & ill-disciplined chaos. That’s just the way it is, & is usually reflective of the current fundamental sentiment & weighting.
But essentially, the make-up of the price bars & their behaviour on & around my support/resistance zones will tell me all I need to know regards the strength of the current momentum.
in other times, the market could be consolidating leaving you high and dry...have you pin pointed any other means (suggestions) of guaging momentum without using indicators (am just not good with those)
I don’t use indicators, no. As I said in the previous paragraph, I’ll use the bar/candle prints….vicinity of price….overall volatility & general fundamental bias to judge the potential of the trades ability to progress.
I guess a good percentage of that boils down to familiarity of your instruments + experience (& knowledge) of your strategies.
also, when using peak and trough analysis, what time frame is best to use to guage the trend?
Peak-trough/trend behaviour is present in all timeframes, from the smallest to the largest. It doesn’t really matter which timeframe you choose, it’s really down to what particular style you prefer to operate under.
I would say however, if your template frame is say a 15m, then you’d maybe want to keep an eye on a couple timeframes higher (60/240m) to check the behaviour & ensure you’re analysing & executing your trades in the general direction of the dominant trend if one exists?
Linear Mode
