This showcase page was written by a guest author, Mark Tinghino of Moonbeam Trading. Mark is the developer of the TeeShot indicator, a turning point forecasting tool for daily charts. In this showcase page, Mark will discuss how he uses this tool in conjunction with some of the indicators found in Wave59.
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Using the Tee Shot Indicator with Different Timeframes
You can use the Tee Shot reversal dates, which are marked on the above chart with vertical dotted lines, in combination with standard Japanese candlesticks and other Wave59 indicators, such as 9-5 Count and Exhaustion Bars. On the above chart Exhaustion Bars 1 are charted with yellow and aqua dots and Exhaustion Bars 2 are charted with red and dark blue dots. This type of analysis can provide you with some strategic market turning points, which can be utilized for longer term position trades as well as short term swing trades and even day trades. For those not versed in candlestick charts, on the above chart days with a higher close from the opening are charted with white candles and days with a lower close from the opening are charted with red candles. The wicks depicted with vertical black lines (except where the reversal dates are charted and they are dotted black lines) represent the difference between the high and low of the session and the open and close. The top and bottom of the body of each candle is determined by the open and close.
A) On the session just after the reversal date, there was an Exhaustion Bar 1 sell indicator. On the reversal date itself there was a high wave candle (small real body and long wicks). The market dropped in price over six sessions, providing a nice opportunity for a swing trade.
B) On the session just before the reversal date there was a red 9 (a sell indicator), and an Exhaustion Bar 1 sell indicator on the reversal date with a bearish harami candlestick pattern (a small real body of the down candle completely inside the large real body of the up candle from the prior session). As you can see, it would be difficult if not impossible to profit from that trade setup. On the other hand, we as traders are not looking for 100% winners - merely setups with an acceptable level of probability.
C) Here we have the same combination of indicators and candlestick patterns as in B, but with much better opportunity for profit over six sessions. Note the spinning top and evening star candles following the reversal date and the morning star candle at the end of the down move when the market fell once more into a bracketed trading range for six sessions.
D) Note the Exhaustion Bar 1 buy indicator on the reversal date. This setup provided an opportunity for six profitable day trades in a row on the long side of the market.
E) Note the evening star candle just prior to the reversal date and the Exhaustion Bar 2 sell indicator on the reversal date. The only opportunity with this setup is for a day trade on the short side for a single session.
F) Note the bearish engulfing candlestick pattern (the red candle extending beyond the top and bottom of the white candle from the prior session), red 9 and Exhaustion Bar 1 sell indicator on the session just after the reversal date. The market attempted to break out to the long side and tests the low of the reversal date, but remained in a bracketed range.
G) A first test of the high at F as part of the triple top formation. Note the Exhaustion Bar 2 sell indicator and bearish engulfing pattern on the reversal date. Whether or not it was a major top as opposed to a minor top will be revealed over the next several weeks or even months.
Mr. Tinghino is a registered Commodity Trading
Advisor and principal of Moonbeam Trading, as well as a technical analyst and
Account Executive with Worldwide Associates in Chicago. For more information,
please check out his website: www.mtcta.com.
The information and data in this article were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Worldwide Associates Ltd., Moonbeam Trading, their officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors relating to the markets in general or to the implementation of any specific trading program, which cannot be fully accounted for in the preparation of hypothetical performance, results and all of which can adversely affect actual trading results.