Predict breakouts & trend reversals usin using MACD/bb%
Can't seem to find this anywhere on the internet, so I thought I'd create a post here explaining my strategy.
You can use almost any lower indicator, but I find stochastics, BB%, and /macD work best.
We all know to use these indicators to find divergences, but pivot pivots are almost never true reversal points.
A true reversal/breakout can be identified by drawing a simple trendline.
rule.
Previous divergence predicts next trend breakout/reversal
1. to 2. = disagreement
2. to 3. No disagreement
/= A trend breakout on the volume indicator precedes a trend breakout on the price chart.
Breaking point into structure
--------------------------
When using the BB% indicator, the same rules apply as when using simple Bollinger Bands.
rule.
1/ Mark the high (or low) outside the Bollinger Bands, then mark the high (or low) inside. Typically the following internal highs are higher than the external highs, i.e. relative to Bollinger Bands, indicating a reversal. Remove the Bollinger Bands and this is a divergence. The BB% indicator reflects Bollinger Bands.
I can explain this better with pictures.
Hope this helps some people enjoy
You can use almost any lower indicator, but I find stochastics, BB%, and /macD work best.
We all know to use these indicators to find divergences, but pivot pivots are almost never true reversal points.
A true reversal/breakout can be identified by drawing a simple trendline.
rule.
Previous divergence predicts next trend breakout/reversal
1. to 2. = disagreement
2. to 3. No disagreement
/= A trend breakout on the volume indicator precedes a trend breakout on the price chart.
Breaking point into structure
--------------------------
When using the BB% indicator, the same rules apply as when using simple Bollinger Bands.
rule.
1/ Mark the high (or low) outside the Bollinger Bands, then mark the high (or low) inside. Typically the following internal highs are higher than the external highs, i.e. relative to Bollinger Bands, indicating a reversal. Remove the Bollinger Bands and this is a divergence. The BB% indicator reflects Bollinger Bands.
I can explain this better with pictures.
Hope this helps some people enjoy
























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