Friday, March 28, 2014

Synchronized Bullish Alignment = Super Profits

A trader would normally focus on a single timeframe and take positions accordingly. However, the price plays a tug of war with the pulls and pushes of the three time frames. The resultant force would determine the quality of a trend.

In our  research paper Triple Trend Oscillator - Technical Insights we talked about synchronized bullish alignment of major, intermediate and minor trends.   An alignment of trends in the three time frames can result in a major impulse move in a relatively short period of time. High leveraged and safe trading positions can be created if the exact timing of such a move can be identified. 

The main requirement for such an impulse would be :

1. All the three trend i.e. major, intermediate and minor should be placed above the zero line.
2. The three tends should be bullish i.e. rising.
3. The minor trend should be placed above the intermediate trend and the intermediate trend should be placed above the major trend.
4. The trigger line should have crossed zero to generate a buy signal.

In the following hourly charts with TTO, the bullish alignment satisfying the above conditions is clearly visible with the resultant quick price movement.