Quick note on the chart-- Upon inspection, you'll see that I use both price action in concert with indicators to identify entries and exits. This particular chart was textbook in that it ran unabated from overbought to oversold. A very trendy day. I made no trades off this chart. This is purely explanation of method.
Oh cool. Yeah I got short at 9:50ish exit around that bottom at 10:00. Stayed away and then short at 2:50ish. More of a day trader. Cool stuff first time on here my buddy showed me this site but very cool. So gotta get set up first but plan on adding more to the NQ chatter. Charts to come
So you're saying price action at overbought/oversold areas shown by your indicator? How is that different than price action at overbought/oversold areas shown by channel/range limits?
It is dynamic and is based upon current activity as opposed to static areas that may or may not be revisited by noise.
We do not have to be totally overbought or oversold either. It just typically will make the ensuing move stronger. It's the price action in concert with the indicator(s).
Isn't the slope of a channel limit dynamic since it changes over time? Don't the limits of the range tell us where we are in terms of current market activity? As in where traders are and are not trading?
Oh yeah no I totally agree. I just throw a line in at 50% on the RSI and then treat the over bough over sold as more extream. Again day trader so very quick in and out. I also use the 5 min chart. But with 50 line I get more triggers and over all get in and out more.