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Psychology and Money Management


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Millionaire in 10 weeks & Conversation with broker

  #48 (permalink)

Montreal
 
 
Posts: 128 since Jan 2013


Cloudy View Post
Is the bottom/darker cloud set on a higher time frame similar to a 5min vs. 1min proportion? What happens when in chop and the clouds keep turning over each other, or does that rarely happen with your indicators (?) because a main concern is usually when the trend is ending.

My 2 clouds are not based on time or n previous bars, they are based on a fixed price range and yes the darker cloud (longer TF) is set on a 10-12 pt range while the lighter cloud is set on a smaller 6-8 pt range to capture the change in trend.

I agree with you that our main concern is to be warned when the trend is changing and that is why I added a 2 cloud with a smaller TF to tell us that the trend is changing.

You can see in the screenshot below that the light blue cloud is suddenly moving to the upside in white and when it crosses the darker cloud, it changes from dark blue to light gray.

In a choppy market when price jumps up and down on a small range like 10 pts or less you get this smooth setup.

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But when the market goes up and down by waves of 10+ pts you get this crazy movements in the 2 clouds. This is fairly rare.

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When you see this type of pattern, DO NOT TRADE, even if this means sitting on your hands for a few days. Wait for the 2 clouds to run smoothly in parallel like we saw on the last 3 days.

This was last Friday...

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And this was last Thursday...

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This was last Wednesday...

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Last edited by MerlinWorld; July 29th, 2019 at 12:38 AM.