06-03-2018 Dax Technical Analysis

Good morning traders, how are we all?

06-03-2018 Dax Outlook

Price reached just below the 12280 trend defining level this morning. Yesterday we saw a 400 point daily candle, which would be considered a wide range outside bar. It was both lower and higher than the previous day, and wider than the previous 10 days, and the lowest we have seen for some time.

This could be considered a strong bullish sign and present some buying opportunities from lower levels.

My thinking from yesterday was that we have completed bearish impulse wave lower. The bearish impulse leg began at the beginning of last week and found the low yesterday. I was thinking that we would now see a bullish reaction leg from that low (otherwise known as a bounce). We saw that bounce last night and this morning.

The question is now whether or not this current price action is simply a bullish bounce or a full-blown reversal. The 12280 level could be important in helping to decide that.

06-03-2018 Dax BB RSI Trade Signal

I have coded one of my strategies into a technical indicator. My strategy is based on the article that I published last week. The strategy is a mean reversion strategy and I call it BB RSI. The strategy is basically selling when overvalued and buying when undervalued. My idea for the strategy is to target an area where price is balanced. The indicator for this strategy is available to premium members in the forum. To find out more about premium membership click here.

This morning we see a valid signal, which I have posted on the ideas page. (So congratulations to the early birds who caught that on the page). Make sure to regularly check back to this page as it is updated during the day.

Anyway, the idea was based around seeing bearish RSI divergence above the Bollinger band. From here there is an opportunity to short and watch price go back down to reach the centreline of the Bollinger band. The idea offered 3.68 to 1 reward. Now we wait and see whether or not the move plays out. Never ever risk more than 2% of your balance on a single trade. If you are risking more than 2% of your account on a trade, then you are less a professional trader and more of a gambler. Gamblers rarely have sustainable futures in this business.

EDIT: This idea was stopped at breakeven.

06-03-2008 Dax Charts

On the TPO we have touched the Point of Control from Thursday and this is considered a good turning point.

Yesterday on the 2500 tick chart I posted three zones that could be interesting to watch for potential shorts. We have just tagged the last zone this morning. We are currently seeing a reaction to this zone. Which is also in line with the BBRSI setup and the point of control that I have mentioned previously.

Dax Sell Zones

06-03-2018 Dax Key Levels