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dzonefx
dzonefx
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Number of messages : 636
Points : 3981
Date of Entry : 2013-01-29
Year : 49
Residence Country : Beograd

ma1 Kangaroo Jump on Trend

on Sat Sep 26, 2015 2:18 pm
The trendy kangaroo is a special case of the kangaroo-tail trade. This is a specific method for jumping on trends. This price pattern does involve a kangaroo tail, but the overall set-up in relation to the nearby candlesticks is very different from the standard kangaroo tail. In fact, the defining feature of the trendy kangaroo is that it must print during a trending market.

Obviously it does not matter if the market is trending upward or downward; the key characteristic here is that the market is trending. It seems nearly every trader has a different definition of a trending market. The large majority of technical indicators are used to identify a trending versus nontrending market. Naturally, as a naked trader, you have no need for indicators, even when you are determining whether any market is trending. To determine whether any market is trending, you will need a consultant.  

Trend Indicators

You will need several things to identify a trending market. First, you will need some cookies or otherwise tasty treats (maybe some strawberries, some chocolate, or an apple). Second you will need your favorite charts, set to a line chart. Third, and finally, you will need a consultant. This consultant should be between the ages of 6 and 10 years. You may need to call around to find a consultant of the appropriate age, but this is well worth the effort. Friends, neighbors, and distant relatives may be invaluable in aiding you on your search for your consultant. Once you have your consultant, you are ready to determine the trend.Please do not be tempted to purchase a fancy technical indicator to determine if a market is trending. All you really need is an eight-year-old. All you have to do is point to a line chart and ask your consultant this question: “Is this line going mostly up, mostly down, or mostly up and down?” Your consultant will tell you all that you need to know. After this brief session you may pay your consultant the agreed-on fee and go forth with your trading. I would encourage you to use this method whenever you are unsure whether the market is trending or in a consolidation phase. Obviously, you must choose the chart carefully when you do this. If you mostly trade the daily charts, make sure that your consultant has a good look at the daily chart. If you mostly trade the one-hour charts, make sure that your consultant provides an assessment of the one-hour chart.

The market is always trending in one timeframe or another, so the question that you present to your consultant should be limited to the market and timeframe you are interested in trading.If your consultant has identified that the market is trending, you are now ready for the trendy kangaroo tail.


Trading Tredny Kangaroos: Resting Spots


Once your consultant has filed his report, you will know precisely if the market is trending. If your consultant reports that a trend has formed on the charts, it’s time to look for trendy kangaroos. Trendy kangaroos are places on the chart where the market has paused to take a rest.

You will know the market is resting when you see several (usually 3–10) candlesticks in a small consolidation zone. This is unlike the consolidation box used for the last-kiss trade, because this consolidation can be something as simple as three small candlesticks that do not seem to go very far. The market is resting after some strong trending moves upward (see Figure 10.1).

FIGURE 10.1 This is a market pause during an uptrend on the AUD/USD daily chart. Notice how all four candlesticks trade inside the box.
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If the market is in a strong downtrend, a market pause will look much the same. There will be several candlesticks (again, usually between 3 and 10) all trading within a tight range. This is your clue to get ready because a trendy kangaroo may appear (see Figure 10.2).

FIGURE 10.2 The market is in a strong downtrend on the USD/CAD daily chart.Notice how the candlesticks are restricted to a tight consolidation range. All the candlesticks trade across the same price range during the market pause.
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By:Alex Nekritin

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