![]() That is why we will try to improve signal quality with the help of cluster analysis and Market Profile. ![]() It could be difficult to filter out signals with the help of the technical analysis indicators. And vice versa, if the red line is above the blue one, it means that it is a downtrend.If the blue line is above the red one, it means that it is an uptrend.That is why, even the indicator creator applies additional filters for identifying the trade direction.įor example, you can use the ADX indicator. However, despite the simple indication in the form of the histogram colour, traders may experience difficulties in identifying the direction, in which the price would move after a breakout. You can use the following as exit signals: If movements on different time-frames coincide, it intensifies signals. The average movement lasts for about 8-10 bars. You should stay in the trade until the histogram becomes bigger/smaller. ![]() If the histogram is above zero, a long position should be opened, if it is below zero – a short one. John Carter writes that, technically, the first grey dot shows the trade entry. At these moments, ‘energy is released’ and bands expand. Technically, the SM indicator looks for places where Bollinger Bands go outside ATR.
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