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Monday, February 14, 2011
New Momentum Indicator & Renko vs. Range Charts
- The range bar measures a set range of price movements and when that range is met the bar prints.
- 13RANGE = 13 TICKS OF PRICE RANGE IN EVERY BAR
- A renko bar does the same except the range has to be all in one direction for the bar to print.
- SIMILARITIES: they both print when the market moves (unlike time or minute)
- TIME CHARTS show the market moving when it really isn’t.
- We like to use RANGE for our trading, we make more money when there is a wider range, so why not use range to tell us when to trade.
- Renko benefits = hold the trade longer, stay in the trend, but you can also stay in a LOSING trade much longer. (disadvantage)
- You would use another type of chart to manage a stop
- Range charts show you the activity INSIDE the candle.
- Did we move up, and then drop? Did we go straight up? Or straight down?
- Bullish/bearish candlesticks, and we DON’T get those with Renko.
- CANT SEE the activity inside the candle on renko
- JJMomentum Indicator
o Download the indicator
o Download the chart templates
o Open the 13range and load Fast13
o Open the 21range and load fast 21
o That’s it!
o The 21range chart looks at the 13range
o The 13range chart looks at the 21range
o How it works:
o Green = both momentum indicators are pointing UP
o RED = both momentum indicators are pointing down
o Does not color if they don’t match
o Does not color GREEN if overbought
o Does not color RED if oversold
- End of March Quad Witching: the week of march 18th is a bad dream, that cn easily turn into a nightmare.
- Thursday and Friday will be nasty
- Wacky Wednesday will be a challenge, but still trade able
- End of Q1 and the 3rd week of March (quad witching)