Congestion Entrance Price Action - MT4/MT5 Resources
Transaction type:
Congested entrance
definition:
1. Trend - based on traditional HH HL or LL LH. Here is a link to understand where price action is trending. http://www.tradeology.com/priceaction.html
2. Direction - the closing price of the current bar is below or above the high or low of the previous bar.
Higher time frame rules:
Rule 1 identifies trends based on a higher starting time range that is also a multiple of 4 or 5 of the smaller time range. The starting time can be the end of last month, the beginning of the year, the opening of the previous week, etc. The idea is to pick a time and use the price at that time as a reference price to determine whether the current trend is up or down.
Rule 2: The next bar closes within the range of the previous bar, which is the congestion entrance.
Rule 3 marks the high and low of these two bars.
Rule 4 Switch to a lower time frame multiple
Lower timeframe rules:
Rule 5 Make sure the next close is below the previous bar's low and enter the trade.
Rule 6 Set your stop loss at the highest point of the previous bar.
Profitability is up to you. Ideas are welcome.
Diagram: * I will update the diagram according to Rule 1 later.
This example is based on going short the market, and vice versa for going long on any trade.
Target:
Make this trade as profitable as possible with minimal risk. In other words, get a high P&L multiple.
Notice:
Any suggestions on how to improve this idea will be updated in the first post so that it is easier to find for those interested.
Congested entrance
definition:
1. Trend - based on traditional HH HL or LL LH. Here is a link to understand where price action is trending. http://www.tradeology.com/priceaction.html
2. Direction - the closing price of the current bar is below or above the high or low of the previous bar.
Higher time frame rules:
Rule 1 identifies trends based on a higher starting time range that is also a multiple of 4 or 5 of the smaller time range. The starting time can be the end of last month, the beginning of the year, the opening of the previous week, etc. The idea is to pick a time and use the price at that time as a reference price to determine whether the current trend is up or down.
Rule 2: The next bar closes within the range of the previous bar, which is the congestion entrance.
Rule 3 marks the high and low of these two bars.
Rule 4 Switch to a lower time frame multiple
Lower timeframe rules:
Rule 5 Make sure the next close is below the previous bar's low and enter the trade.
Rule 6 Set your stop loss at the highest point of the previous bar.
Profitability is up to you. Ideas are welcome.
Diagram: * I will update the diagram according to Rule 1 later.
This example is based on going short the market, and vice versa for going long on any trade.
Target:
Make this trade as profitable as possible with minimal risk. In other words, get a high P&L multiple.
Notice:
Any suggestions on how to improve this idea will be updated in the first post so that it is easier to find for those interested.
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