Simple's Green Room

[simplegreen]

ATTENTION BOARD Quad Tunnel Charting..Part1..I promised several of you I would try to do a teaching on the use of Quad Tunnel..EMA(62) and EMA(400) which is the mainstay of my charting setup.On this chart there is a lower indicator which is the STI(2,5) but its really just in there so that the main panel will not have excessive expansion..IOW it could be anything you desire..even a blank panel...the real workhorses of this chart are in the main panel...the EMAs.

The Quad Tunnel is made by using 4 EMAs...121..144..169..196
To this chart we also add an EMA(62) and EMA(400)
On my chart I am using Green for EMA(400) and White for EMA(62) ..color your EMAs to personal preference and so they can easily be distinguished at a glance...also I like to use Purple for EMA(196)
One reason for being able to quickly spot EMA(196) is it tells me if a pair is bearish or bullish on a particular time frame...I can tell instantly if its bullish on the 5 minute..for example... because the EMA(196) is at the bottom of the Quad Tunnel ...but the EMA(196) is at TOP of the one hour Quad Tunnel so I know its longer term bias is bearish!There is more to the Tunnel than just 4 pretty lines.REMEMBER...196 at bottom of tunnel is bullish relative to time frame and 196 is bearish relative to time frame.
Another thing that occurs with the Quad Tunnel is what I call the Tunnel Twist.Its similar to the Kumo Twist seen on Ichimoku Cloud charts.What happens is this...if a pair is bullish and EMA(196) is at bottom of tunnel and BTW the EMA(121) is obviously at top of tunnel.If trading action becomes more and more bearish over time and yet 196 is at tunnel bottom(bullish) then the 4 lines of the tunnel begin to get closer and closer together(CONVERGENCE)..if this continues long enough then the lines are stacked and merged into what seems a single line then soon the tunnel begins to have seperation on the lines(DIVERGENCE)..What you note next is that the EMA(196) has now moved to the top of the tunnel...THE TUNNEL TWIST!In theory this is a signal that a new trend is now official relative to the time frame being viewed.
Will end part one with a one hour GBP/USD chart for careful study and in part two I will get into the EMA(400) and if not too lengthy the EMA(62)..the 400 is a heckuva tool as you can see in this example chart...just look at how many hours price action beat against the EMA(400) resistance before caving in to the downside!BTW EMA(400) is the Green line near top of chart.