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Monday, September 03, 2007 5:42:50 PM
** Quick Chart Lesson: The "Pincher" **
Disclaimer: First thing first... this concept is NOT mine, all the credit goes to freto38 (http://investorshub.advfn.com/boards/profile.asp?User=60535) and secondly, charger (http://investorshub.advfn.com/boards/profile.asp?user=84515) for bringing it to my attention.
This lesson is merely my "take" on it.
Ok, there are THREE key indicators for this set up. The PPO, ADX, and RSI (using periods of 2 and 5).
Before you even think about anything else, the first thing you need is "the pinch", which is when the PPO Line and ADX Line (both labeled in chart beneath) pinch together. When this occurs (purple circle on chart), you start to look for an entry point...
Option 1 is for the traders with higher risk tolerances... meaning, they get "the pinch" but have no other 'confirmers'... this option is represented by the vertical yellow line below.
Option 2 is for traders who don't want to "walk the line" as much... this option is represented by the vertical pink line... as can be seen, this option requires the RSI(5) and RSI(2) to both have crossed 30 (in this example, the RSI(2) had already crossed, so we were just waiting for the RSI(5) to cross 30)...as can be seen below, the RSI(5) breaks 30 and its TIME TO BUY!!
Even if you would have waited to the last possible second at bought at Option 2's closing price ($6.77), you would have had the potential to make 36%...
** IMPORTANT ** These set-ups have heavy resistance at the SAR and if they break the SAR they usually get knocked down by the 20dma... in other words, look to take some profits around the 20-MA!!
Comments, questions, requests for other lessons? Please don't hesitate to contact me!
Disclaimer: First thing first... this concept is NOT mine, all the credit goes to freto38 (http://investorshub.advfn.com/boards/profile.asp?User=60535) and secondly, charger (http://investorshub.advfn.com/boards/profile.asp?user=84515) for bringing it to my attention.
This lesson is merely my "take" on it.
Ok, there are THREE key indicators for this set up. The PPO, ADX, and RSI (using periods of 2 and 5).
Before you even think about anything else, the first thing you need is "the pinch", which is when the PPO Line and ADX Line (both labeled in chart beneath) pinch together. When this occurs (purple circle on chart), you start to look for an entry point...
Option 1 is for the traders with higher risk tolerances... meaning, they get "the pinch" but have no other 'confirmers'... this option is represented by the vertical yellow line below.
Option 2 is for traders who don't want to "walk the line" as much... this option is represented by the vertical pink line... as can be seen, this option requires the RSI(5) and RSI(2) to both have crossed 30 (in this example, the RSI(2) had already crossed, so we were just waiting for the RSI(5) to cross 30)...as can be seen below, the RSI(5) breaks 30 and its TIME TO BUY!!
Even if you would have waited to the last possible second at bought at Option 2's closing price ($6.77), you would have had the potential to make 36%...
** IMPORTANT ** These set-ups have heavy resistance at the SAR and if they break the SAR they usually get knocked down by the 20dma... in other words, look to take some profits around the 20-MA!!
Comments, questions, requests for other lessons? Please don't hesitate to contact me!
Need an Annotated Chart? Stop by my board -- http://investorshub.advfn.com/boards/board.aspx?board_id=8765
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