STRATEGY BASED ON A MULTI-TEMPORAL FRAMEWORK – PART 1
- Volume Profile (VPSV and VPSR)
- Volume Weighted Average Price (Multi-Timeframe VWAP V3)
- Momentum Indicator (Chikou Span)
- Trend Strength Indicator ( ADX )
- Price Volatility Indicator (ATR)
- Volume Indicator (HawkEye Volume Indicator)
- forex analyzer
STRATEGY BASED ON TECHNICAL ANALYSIS (RESISTANCE/SUPPORT- SUPPLY/DEMAND)
Long-Term Price Mapping:
1- First, the monthly graph is analyzed with the VPSR, the purpose is to determine the value zone (70% of Volume) and where the price has been mostly negotiated, this allows establishing 3 points of interest for the price, the lower part corresponds to a demand zone, the superior supply zone and the most negotiated price will be the equilibrium point.
These three points will work as a magnet for price action. Example:
2- Once we have determined these price levels, we move on to a Daily chart timeframe to implement other resistance/support levels. Using other tools, but we place the graph in a view that allows us to observe the last time the price touched these three levels and what was its reaction (bearish / bullish / range), Example:
2.1- Now we activate the VWAP but we are going to use the following configuration: Monthly, Quarterly and Yearly with deviation 2 and 3 activated (the deviation is going to be used as over-price and over-bought levels), we should have something like this, Yellow Line ( VWAP Annual), Blue Line ( VWAP Monthly), Orange Line ( VWAP Weekly), Fuchsia Line (Deviation 2), White Line (Deviation 3)(you decide the colors):
Now him VWAP will act as resistance and support zones, the deviations as well, one of the aspects that we are going to observe is that the VWAP is that it restarts every time a period begins, in this case, it is annual. These two tools will allow us to see the general picture, the strength of the trend in the long term and take the positions that we consider most profitable.
3- The use of the ATR and the ADX is the same as always, but in this case two ATRs have been applied, one at 5 periods (1 week) and the other at 20 periods (approximately 1 month), to determine how viable the objectives are. taking profit (for stop losses it will depend on personal management) and also serves as a warning, together with the ADX if both begin to decrease, the weakening of the trend is confirmed.
4- The Chikou Span, is the moment indicator, it indicates 3 moments: bullish when it cuts upwards at the price, bearish when it cuts downwards at the price and in consolidation when it is close to the price. The movements in “V” or inverted, help us to identify strong support / resistance zones, especially when we work the right side of the chart and we do not know what to expect when the price goes down or up without a historical nearby. Example:
Chikou Span Moment:
So far, it would be the first part that would help us see the general picture of the price history and what we should expect from the current price behavior. It is clear that the indicators serve as a tool for our analysis but there are other factors that also influence the price that escape the data that can be seen in the graph.
Happy trading to all, ??????