Ah, thank you for the critical clarification. My apologies for making the standard assumption.
The Corrected Logic: Trading with Momentum
Buying High (near 65): In a strong uptrend, you are not waiting for the price to become "oversold." You are waiting for it to show strong bullish momentum, which is indicated by the Stochastic reaching the upper end of its range. You are essentially "buying strength." A move to the 65 level in a confirmed uptrend is a signal that buyers are aggressive.Selling Low (near 35): In a strong downtrend, you are not waiting for the price to become "overbought." You are waiting for it to show strong bearish momentum. A move to the 35 level in a confirmed downtrend is a signal that sellers are in firm control, and you are looking to join that momentum.
The Final, Corrected Six-Layer Trading Plan
Action: Confirm a clear, strong primary trend. The moving averages should be fanned out and pointing in one direction. Draw your Fibonacci to identify key S/R levels.
Action: Confirm the medium-term trend is aligned with the D1/H4 trend using your moving averages. A strong trend will have the price consistently riding above (for uptrends) or below (for downtrends) the MA(60).
Action: This layer's role changes slightly. You are now looking for signs of a "momentum push."In an Uptrend: You might see the price "walking the band" - consistently touching theupper Bollinger Band.In a Downtrend: You might see the price "walking the band" - consistently touching thelower Bollinger Band.
Action: This is now your primary trigger. You wait for the Stochastic to reach the level that confirms strong momentum in the direction of your trend.
Action: You combine the Stochastic signal with a classic price action pattern to get your precise entry and stop-loss.
The New Entry Scenarios in Detail
For a BULLISH Entry (Buying Strength)
Stochastic Trigger (Layer 4): You wait for theStochastic to reach or cross above your 65 level. This is your signal that bullish momentum is strong.Price Action Entry (Layer 5): You don't just buy blindly. You look for a small, tight consolidation pattern on the M15 chart while the Stochastic is high. This is called aBull Flag or aHigh and Tight Flag .The price makes a strong push up (the pole). It then moves sideways or slightly down in a tight channel (the flag).
Execution (Layer 6): Entry: Buy the moment the price breaksabove the top trendline of the flag .Stop-Loss: Place your stop-loss just below thelow of the flag pattern.
For a BEARISH Entry (Selling Weakness)
Stochastic Trigger (Layer 4): You wait for theStochastic to reach or cross below your 35 level. This signals strong bearish momentum.Price Action Entry (Layer 5): Look for a smallBear Flag .The price makes a sharp drop (the pole). It then moves sideways or slightly up in a tight channel (the flag).
Execution (Layer 6): Entry: Sell the moment the price breaksbelow the bottom trendline of the flag .Stop-Loss: Place your stop-loss just above thehigh of the flag pattern.
Summary of the Corrected Workflow
Confirm a strong, clear trend on D1/H4 and H1/M30. (This is the most important step for this strategy).Wait for the price to be in a "momentum push" phase (e.g., near the outer Bollinger Bands on M15). Wait for the Stochastic to confirm this momentum (crossing above 65 for buys, below 35 for sells).Once momentum is confirmed, find a small flag pattern on the M15 chart.Enter on the breakout of the flag and place your stop-loss on the other side of the flag.
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