Trading tool: any
Period: any
Used indicators: Simple Moving Average
(40).
Volume of the transaction: arbitrary,
but always constant.
Tactics algorithm:
One of the most difficult situations in
trading occurs when the price gradually increases, but sometimes
makes large movements in the opposite direction. A simple technique
of the Chariot (Sweet Chariot) is designed to use this kind of swings
in a gradually growing market. This trading strategy is very simple,
but effective in a situation where the price moves in a side trend
with a general upward trend in the market. The "Chariots"
system uses the usual 40-day moving average closures. It looks like
this:
one
We prefer to use it on weekly charts,
but it can also be applied on daily and intraday charts.
The trading rules used in this system
are very simple:
1. When the price is above the moving
average, long positions are opened.
2. Short positions in this system do
not open.
3. When the price goes flat (without
reversals) and fluctuates around the moving average, new positions do
not open. 4. On the first candlestick, which is completely above the
moving average, and which closes in the upper part of the price
range:
[*] Open a long position on the first
candlestick, at least 80% of the length of which is above the moving
average, if it closed in the upper third of the price range.
[*] Open a long position during the
breakout of the top of the candle, which corresponds to these
characteristics. This candle is called the entry candle.
The following chart clearly shows the
places where you can open long positions:
[*] Before the first entry candle, the
price was balanced above and below the moving average. The first
opportunity to enter on the chart is provided after the price has
emerged from under the moving average.
[*] The candle preceding the first
entry candle is above the moving average. It closed in the upper half
of the price range. It signals the possibility of opening a long
position, but you should enter when the level of the top of this
candlestick is broken through. The same applies to the following
combination of candles.
[*] The lower part of the next candle
preceding the entry candle is under the moving average, however, 80%
of its price range is above it, and it closes in the upper third of
its price range.
[*] The candle, preceding the
penultimate candle of the entrance, is divided by the middle one by
about half and closed in the upper third of its price range.
[*] The candle preceding the last
candle entry is above the moving average and closes in the upper half
of its price range. It fully fits the parameters of the entrance
candle.
A few general comments:
[*] Make sure that the price turns over
and sometimes below the moving average. The more reversals, the
better.
[*] Make sure that the price is
trending, but not very cool (no more than 45 degrees). With a strong
uptrend, the price will almost always be the moving average.
[*] Please note that the price should
always be around the moving average. If this is not the case, then
the Chariots technique will not be used.
If the market moves in a sideways trend
and the moving average also moves in a flat, you may encounter the
following difficulties, which are illustrated in the lower chart.
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