How to enter a trend by reading market’s forces

All traders experienced entering a clear bull rally… just at what it seemed the top. The market then reverses, hits your stop and right after that resumes the uptrend. How do they know???

And we all wish to have an indicator that clearly helps us to avoid such situations. We believe that the XBP Bulls and Bears Support and Resistance Levels (XBP BB SR for short) indicator can really help you. Let’s review the action of 29th of February 2016 as a good example of timely entries into a trend.

Before you continue reading you may want to read a bit about the XBP BB SR indicator. You can do so here.

Now that you are familiar with the indicator, we shall introduce the concept of trading using tick charts (read more here) and with more than one time frame. During our trading hours, which start at 9 o’clock Chicago time (yes, we avoid the first 30 minutes), we mainly use 2 tick charts, 4,500 ticks and 1,500 ticks. 4,500 ticks is 3 times 1,500. So for each bar in the 4,500 ticks chart we will have 3 in the 1,500 ticks.

The key to use 2 different tick charts is to follow the big trend visible in 4,500 ticks and to time our entries and exits based on the finer detail in 1,500 ticks. Let’s see the example of the trading day of 29th of February 2016:

4,500 ticks:

20160301_Trading_Market_Forces_4500t_01

I’ve marked with numbers the major support and resistance levels in the 4,500 ticks chart (if you wish you can read the full day review here to better understand why those levels were the major ones for the day).

Now we will see the same levels in the 1,500 ticks but this time we will have multiple occasions to enter the trend.

1,500 ticks:

20160301_Trading_Market_Forces_1500t_01

As you can see, by following the major direction visible in 4,500 ticks but waiting to enter when 1,500 ticks syncs will ensure you a high probability entry.

For the exits you can choose, either to take quick profits out of the table and exit when a contrary signal appears in 1,500 ticks. For example, if you are Long you exit when a resistance (white horizontal line) appears. You could also stay in the trade until the contrarian signal appears in 4,500 ticks. If you would like to follow the 4,500 ticks your stop, and thus risk, shall be higher than in 1,500 ticks.

Hopefully this post helps you to profit from the XBP BB SR indicator with low risk entries into any trend.

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