PULLBACKS/CONTINUATIONS/ & HISTORICAL DATA
goal was to find possible ways to identify continuation of market, determine pullbacks, and determine if trend is going to change or stagnate. Historical data analysis combined with price action, and momentum + (bonus=economic data) was the best way to time these signals. per usual, long solid candles provide a longer stable trend, momentum should keep building if inclining/ if declining momentum will drop, on trend indicators such as ADX signal line should confirm trend and the historical data (plus and minus lines) should also illustrate clear & uninterrupted patterns. the formations of the lines also matter if minus line is in middle this can mean market pullback or market is declining/ if positive in middle and minus on bottom this can mean incline etc... when market is trending and has depth + clearly shows direction and trend indicators show clear uninterrupted patterns + momentum building signals continuation. at the point which these lines are contracted/ jumbled up this can signal pullback or false trade.
To identify clear signals for continuation/pullbacks:
1) MacD main signal under historical data signal line suggest trend pullback
2) when ADX lines are crossed for ex: (negative line) in middle (plus line) on bottom and main signal on top can be a market pullback
*when adx indicator is contracted this can indicate a pullback as well and can be
confirmed by momentum if momentum continues to be strong trend change may not be permanent.
3) momentum that ends up evenly output as the last signal can be taken as a break then continuation, a pullback start, or trend change, etc.. should use other indicators combined to determine outcome & goal.
4) when indicators are turned horizontally this allows pullbacks to occur more than often can be taken as pullback or trend change should use other indicators to determine outcome and goal.
*Historical Data crosses + where market currently sits + price action = possible pullback scenario
5) when market is trending and has depth + clearly shows direction and trend indicators show clear uninterrupted patterns + momentum building signals continuation.
* at the point which these lines are contracted/ jumbled up this can signal pullback or false trade