OVERVIEW OF INDICATORS FOR THE THREE TRADES
The soybean market has presented high probability signals at trend reversals for Trade 1 and Trade 3, and a continuation sell signal at Trade 2. Following Trade 2, prices rose above the red and blue trend indicator lines for the daily trend indicator and then had a setup bar at A on 3/18. That sell signal could have been taken as a high probability trend continuation trade. The same pattern occurred at B on 3/26. Prices rose above both the thin red line and blue line for the daily trend indicator. However at this time there was no setup bar as the oscillator did not rise high enough. A price drop below this price bar would create a swing high, and a sell signal could have been placed below it in anticipation of a continuation of the downtrend. This could also have been an add-on position for another short position, depending upon how aggressively you trade.
A better approach is to switch to intra-day charts. Click here to view intra-day charts.
The continuation of the downtrend was expected as the blue MACD line at the bottom of the chart continued moving lower. But as the cycle bottomed, just before the buy at 3, the MACD started up. The MACD starting up, and the red line for the long term trend indicator flattening and moving up indicates a trading range or trend reversal is likely to be seen.
Notice also that the three cycle highs occurred as prices made a top within the time frames of the blue timing bands, and a setup bar and sell signal was generated at all three tops. Following the sell at 1, a trading cycle low was made as prices bottomed in the overlap of the purple and red timing bands, also generating a buy signal. This signal was only used to take profits as the trend was down.
The next bottom occurred beyond the purple band, but still bottoming within the red band. Again, there was a purplesetup bar and buy signal generated to liquidate the short positions. Since the trend was down, there was no long position established. Prices then made new lows, setting up a swing high. The rise above the swing high confirmed the trend reversal and generated a buy signal.
The daily and weekly charts for the recommendations and comments are usually side by side. But only the daily chart have been shown to focus on the indicators and oscillators used to make the trades. Below are two weekly charts, side by side.
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Next: The Weekly Chart