The guest commentator of today’s lecture is Sir David MacdulioBorough.
The lesson would be on RSI2 correction – evaluation. It will start soon. Bring in the projector!
RSI2 was invented for traders who can’t trade that well. It’s like a tandem unicycle with extra flywheels.
Peaks are easy, you just have to be able to count to two and a half. Peaks precede a correction & correction precedes the count.
What about the pedal to metal hump? You cannot see the structure from Mount Trumpmore. You need to adjust the time metric to spot the Whoop-Bam-Boogie.
An ABC collection’s B leg is one of the few entries where you can bet the farm on your house for a lower low/higher high.
B is going to show up as a cross back up/below the 50 and would be occurring with highly subdued volatility. In EUR/USD terms this means a limit order 16-24 pips away from the most recent low / high made by wave A.
So wouldn’t it be beneficial to keep track of the counter move limit of a counter move? I think it would be.
A legitimate correction would arrive after the 3 count, it would include an M print (RSI2<12.5 || RSI2>87.5) and the counter directional push would print an RSI2 on the other side of the 50.
A wrong footed correction is the kind that does not include a higher high / lower low (14 sample) between the A and the C ending points. The next leg coming out of it could still make a new HH or LL, but the rights for a 3-count would be forfeited.
What do you call that spike down printing a new, lower fractal? That is a liquidity break with the purpose if prolonging the move a bit longer sacrificing some fresh blood: trail stops placed a fluctuation size away from the highest note.
My trail stop would be triggered at 33 pips.
The below example is a no-volatility correction that happens during a channeling move, it has 3+ S= Shy of oversold lows and 3 B moves back above 50. Akin to a 3M low print, this is a valid terminal utilizable for a long entry. Take note of the price avoiding to touch the E-16.
People tend to forget that this is a zero sum sucker’s game. Anyone who went short the Euro sitting up to the Dollar strength narrative below 1.14 can be milked indefinitely. Taking price far enough would turn them into buyers they can unload to. Instead of constantly trying to guess where sellers and buyers would be, think about where the bag holders are. If you don’t know who the sucker is…
There is nothing fundamental about trading other than fundamentally everyone’s hoping to make money.