Grey1
Senior member
- Messages
- 2,190
- Likes
- 202
CONSOLIDATION WHAT IS IT ?
Consolidation is the result of volume withdrawals from the stock or the market. During this period traders will be getting conflicting signals in different time frames. In another word your OB/OS oscillator will give OB signal in 1 min ( Example ) and OS in signal in 3 min ( Example ) .
When they both confirm OB or OS then there will be a price break out seen in the lower time frame . This is the first Law in MULTI TIME FRAME ANALYSIS .
The second law of MULTI TIME FRAME ANALYSIS states that higher time frame dominate the lower time frames.. so if DOW is OS in Weekly then that takes priority over the daily and so on . LOOK in EOD for clue to trade the intra day.
The third law of MULTI TIME FRAME ANALYSIS states that momentum is born in Lower time frames ..
Facts:-- it is much much more difficult to trade consolidation as program buys/ sells are at their best during this period
Facts :-- market spends 3/4 time in consolidation ,,, 1/4 trends
Facts :-- Oscillators such as MACCI or RSI are useful in trading oscillation . ADX. MACD , .. are useless , Avoid them
Tip :-- Postion size yourself according to ATR in higher time frame scale in as lower time frame confirm not the other way round .
Tip :-- walk away from consolidation if you can be in cash . you will thank me in a few years time for this TIP
Consolidation is the result of volume withdrawals from the stock or the market. During this period traders will be getting conflicting signals in different time frames. In another word your OB/OS oscillator will give OB signal in 1 min ( Example ) and OS in signal in 3 min ( Example ) .
When they both confirm OB or OS then there will be a price break out seen in the lower time frame . This is the first Law in MULTI TIME FRAME ANALYSIS .
The second law of MULTI TIME FRAME ANALYSIS states that higher time frame dominate the lower time frames.. so if DOW is OS in Weekly then that takes priority over the daily and so on . LOOK in EOD for clue to trade the intra day.
The third law of MULTI TIME FRAME ANALYSIS states that momentum is born in Lower time frames ..
Facts:-- it is much much more difficult to trade consolidation as program buys/ sells are at their best during this period
Facts :-- market spends 3/4 time in consolidation ,,, 1/4 trends
Facts :-- Oscillators such as MACCI or RSI are useful in trading oscillation . ADX. MACD , .. are useless , Avoid them
Tip :-- Postion size yourself according to ATR in higher time frame scale in as lower time frame confirm not the other way round .
Tip :-- walk away from consolidation if you can be in cash . you will thank me in a few years time for this TIP
