Which Signals to Trade On?
1. Trade When Trend and Zone Align
Buy Signal Near Demand Zone:
Conditions:
Price is near the Demand Zone and a buy signal appears.
Confirm that RSI is oversold (around 30) near the demand zone.
Supported by EMA Ribbons and Trend Ribbons:
EMA and price are moving upward.
Action:
Trade on the buy signal in this scenario.
Sell Signal Near Supply Zone:
Conditions:
Price is near the Supply Zone and a sell signal appears.
Confirm that RSI is overbought (around 70) near the supply zone.
Supported by EMA Ribbons and Trend Ribbons:
EMA and price are moving downward.
Action:
Trade on the sell signal in this scenario.
2. Trade on Breakout and Retracement Confirmation
Breakdown Below Demand Zone with Retracement:
Conditions:
Price breaks below the Demand Zone.
Retraces back to the demand zone and gets rejected near the zone.
Action:
Trade on the subsequent sell signal after rejection.
Breakout Above Supply Zone with Retracement:
Conditions:
Price breaks above the Supply Zone.
Retraces back to the supply zone and bounces off it.
Action:
Trade on the subsequent buy signal after the bounce.
3. Confirm Using RSI and Volume
RSI Confirmation:
Buy Signal: RSI is oversold (near 30).
Sell Signal: RSI is overbought (near 70).
Volume Confirmation:
High volume should accompany breakouts and breakdowns.
4. Use Multi-Timeframe Analysis
Align Signals Across Timeframes:
Confirm the signal on a smaller timeframe (e.g., 15 minutes).
Validate the trend on a larger timeframe (e.g., 1 hour or 4 hours).
5. Trade in the Direction of the Trend
Confirmation with Trend Ribbon and EMA Ribbon:
Bullish Signal:
Trend Ribbon is green.
Price is above the EMA Ribbon.
Bearish Signal:
Trend Ribbon is red.
Price is below the EMA Ribbon.
Benefits of Trading on the Right Signals
High-Probability Trades:
These signals offer higher accuracy and reliability.
Lower Risk:
The alignment of zones and indicators reduces risk.
Better Risk-Reward Ratio:
Trades result in more profitable outcomes.
Disciplined Trading:
Helps avoid unnecessary and false signals.
Steps to Trade on the Right Signals
Check Alignment of Signal with Zone and Trend:
Ensure the signal corresponds with the demand/supply zone and trend.
Verify Using RSI and Volume:
Use RSI levels and volume spikes for confirmation.
Perform Multi-Timeframe Analysis:
Cross-check signals on smaller and larger timeframes.
Confirm After Breakout and Retracement:
Trade only after the breakout or breakdown is validated by retracement.
Focus on High-Probability Signals:
Avoid impulsive trades; prioritize accuracy and proper confirmation.
By following these steps and focusing on high-probability signals, you can trade confidently with improved accuracy, lower risk, and better returns.
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