Volatility Without Correction

Textbooks out the window, as usually on my classes.

Subject corrections.

#1 objective of a trader is to find a low risk entry, i.e. the end of a correction in a channelling move.

A channeling move is a trending move where the corrections terminate before the 9-Day EMA band (highs to lows) (52 sample on 4H, 207 on 1H, 414 on 30 min).

The Guard Rails are displacement lines to help finding the approximate area where a deep correction could terminate. The displacement is instrument dependent, 1 fluctuation maximum away from the 9 EMA band.

In the case of EUR/USD this distance is 6/5×32 pips (38.4).

In order to find a possible correction during channeling, you should be looking for sudden counter directional volatility, i.e. an opposit coloured candle with a span exceeding a fluctuation size within an hour, right after a 24-hour HH / LL.

Now you need ti ho back to the last candle that was deeply overbought / deeply oversold on RSI2 and start to count.

There are only two kind of corrections. One ends within 14-16 hours and usually does not make it to the other BB (30 sample, HL2). This one goes by the name of Loneliness.

The other kind is sure to make it to the other BB, lasts 23-40-x hours and goes RSI2 deeply oversold/overbought twice with a deeply overbought / oversold print in between, depending in direction. This one is called Disregard.

I have mentioned before that a Loneliness would likely be followed up by a Disregard and vica versa.

Also, the becoming deeply overbought / oversold sequence isn’t exclusive to Disregard, it may happen with a Loneliness sequence as well.

Putting indicators on Closing prices is a sickness I never got. The road travelled is more important than distortions for closing prices.

The first thing to do is finding the spot where a correction may have started.

With everything sdid, this is a solid low (volatility breach reversal) and market would have to retreat first 30-50 pips to take it out.

/// counter vol down after higher high
 if (iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,24,i))==iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,3,i)) && Open[i]>Close[i] && High[i]-Low[i]>320*Point && High[i]>guardrailu[i]){
   ObjectCreate("Friers"+DoubleToStr(i), OBJ_RECTANGLE, 0, Time[i+1], High[i], Time[i], Low[i]);
         ObjectSetInteger(0,"Friers"+DoubleToStr(i),OBJPROP_COLOR,clrPink);
         ObjectSetInteger(0,"Friers"+DoubleToStr(i),OBJPROP_BACK,0);
         ObjectSetInteger(0,"Friers"+DoubleToStr(i),OBJPROP_WIDTH,7);
}

Now let’s apply a counter.

if(i<200){
j=i+1;
while (j<i+20){
 if (RSI2[j]>90 && High[j]==iHigh(symbol,0,iHighest(symbol,0,MODE_HIGH,3,j))) break;
j++;
}

if (j-1>0){
if (j<i+20){
   k=j-1;
   while (k>j-40 && k>0){
     if ((j-k)==14 || (j-k)==16 || (j-k)==23) {                      
         ObjectCreate("Pounterd"+IntegerToString(k), OBJ_TEXT, 0, Time[k], Low[k]-40*Point); 
        ObjectSetText("Pounterd"+IntegerToString(k), IntegerToString(j-k), 11, "Impact", Maroon);
      }
     k--;
   }
}

}
}

So what is the market doing if this move down does not qualify for a correction? Trending lower.

This is not a drill, this is for real.

It is not a matter of believing, it is the matter of listening.

Every time I get the urge to make some video, I get stuck on every little detail, but I am always certain of one thing: I should use Galway is God for music.

I was trying to show something unique about being Hungarian to my daughter. I told her, that when it is raining and the sun is out at the same time, we say “the devil’s beating his wife”. With such metaphoric mindset how can someone not end up becoming a poet?