Hanging out the daily on the close line
Hello everyone.
I woke up in bed this morning with an idea, (probably not the best time, haha) I wanted to place a series of 1SMAs on the chart, set up as follows, high, low and close. Then put a line chart without color.
We then look to see if the closing line touches one of the other lines, at which point we switch from line to bar and trade the opposite color of the candle that touches the outer SMA. (see chart)
An exception is if a contact occurs when the outside SMA moves towards the closing SMA (see chart, orange dotted line}
I used the gold daily chart as an example, but any chart or TF should work. I will look into this further when the market opens...anything can look good in hindsight. Happily, it looks like arrangements have taken place by Friday's close, so we'll see on Sunday.
Essentially, what can be observed here is that if one candle closes very close to its high or low, the next candle will retrace. I'd be happy if you were able to test this as well... I appreciate your interest.
chris
I woke up in bed this morning with an idea, (probably not the best time, haha) I wanted to place a series of 1SMAs on the chart, set up as follows, high, low and close. Then put a line chart without color.
We then look to see if the closing line touches one of the other lines, at which point we switch from line to bar and trade the opposite color of the candle that touches the outer SMA. (see chart)
An exception is if a contact occurs when the outside SMA moves towards the closing SMA (see chart, orange dotted line}
I used the gold daily chart as an example, but any chart or TF should work. I will look into this further when the market opens...anything can look good in hindsight. Happily, it looks like arrangements have taken place by Friday's close, so we'll see on Sunday.
Essentially, what can be observed here is that if one candle closes very close to its high or low, the next candle will retrace. I'd be happy if you were able to test this as well... I appreciate your interest.
chris
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