⚔️Strategy "The difference between the balance points"
Last updated
Last updated
This strategy is a consequence of the "Critical Imbalance" strategy. It will give you an accurate answer to the following questions:
Is the trend strong now? (judging by the price movement during the imbalance)
How strongly has the market reacted to the rebalancing?
Is this recovery a reversal or a continuation?
Step 1. Go to "Add Widget" and open the Trading View tab.
Step 2. In the Trading View tab, select the trading instrument and the timeframe of interest.
Step 3. Open the "1EX Indicators" and turn on the "Balance indicator", then select the Rolling period
IMPORTANT!!!
The "Rolling period" field is the time interval for which the indicator calculates a certain value.
To get better results, you need to choose a period that will be a multiple of 20-50 times your working timeframe on the instrument chart. Lower multiplicity means higher sensitivity, higher multiplicity means lower sensitivity.
Example: TF = 5 minutes, Period = 4 hours (48 candles of 5 minutes each).
We get such a workspace window:
The value of the indicator lines:
Green line - relative value of the dominance of green candles (upward dynamics).
Red line - relative magnitude of the dominance of red candlesticks (downward dynamics).
Description of the trading strategy!!!!!
Determine the movement potential based on the price difference between the balance points. We analyze the first balance point and the next balance point for the location of the candle (price). After that, we select two price levels at these points and look at what the imbalance was (long or short). Next, we measure the distance between prices (reaction) and use strategy patterns to identify the potential for movement.
Long patterns:
After a strong imbalance, the recovery price goes even higher.
After a strong imbalance, the recovery price gives a weak reaction.
After a strong imbalance, the recovery price gives a stronger reaction.
Short patterns:
After a strong imbalance, the recovery price goes even lower.
After a strong imbalance, the recovery price gives a weak reaction.
After a strong imbalance, the recovery price gives a stronger reaction.
CONCLUSIONS:
You can use this strategy both independently and as one of the filters within a variety of trading strategies used by traders.
IMPORTANT! Trading involves risks. The user is solely responsible for their actions or inactions when using the described trading strategy. The strategy and its description are for informational purposes only. The information provided here does not constitute personalized investment advice. News, articles, expert comments, research, forecasts, and other information are presented without considering any specific investment profile, and the financial instruments or operations mentioned may not align with the expected returns, investment horizon, or acceptable risk levels for any particular user. Company 1EX is not responsible for any potential losses resulting from trades based on the described strategy or investments in the financial instruments mentioned in this publication.
