Aleš’s Lessons #8 – Choppiness Mac

Lesson 1:

The first overbought / oversold move would fail back to at least the overbought / oversold neckline, this is why the bracketed numbers are on the screen: they tell you to start fading (on the first break into the overbought / oversold) there and add to your position every 10 or so pips knowing that price would retrace to the neckline where you should be squaring.

You should not fade the second breaks.

Lesson 2: the follow though. The letter f & number is the maximum distance the failed move may be able to reach without crossing over a consolidation mean one more time.

Wherever there is a cross over, you will see a “+” or a “-“. The follow through would be ticked if the next 4-hour print achieves 50% extra distance beyond the length of the 4H bar that crossed over the mean.

F would thus stand for conditional failure and is a warning not to hope for any more gains barring a fresh reload at the mean.

I hope this clarifies things a bit. I believe that this market model covers more plausible market types than any other.

the best entry signals were hands down the continuation divergences