CONTENT:

INTRODUCTION

WHAT IS AN INDICATOR?

ADDING THE INDICATOR

D.Y.O.R

FRAMEWORK INDICATORS:

ALPHA PRIME

ALPHA TRENDBREAK

OSCILLATOR INDICATORS:

ALPHA WAVE

ALPHA MOMENTIMENT

ALPHA VOLUME

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INTRODUCTION

Welcome to the Alpha Indicator Suite Guide

This will give you the outlines of each of the indicators functions

and also alert opportunities along with what they mean. It will

contain an advised timeframe for each indicator along with the best

combination of indicators to use in conjunction. Please note that

this is not a guide on multiple base strategies for the base

indicators or an in depth description on what each of the indicators

are based on or their historical trading relevance - we advise you

always to further in depth reading and learning - you can never stop

learning in trading. If looking at charts is very new to you then it

is heavily advised to spend time learning and practise trading with

Paper Accounts or Backtesting ideas and strategies and simulating

buy’s/sell to see how you would fare in a real market. Even with the

strength of these indicators on your side without a basic knowledge

in trading can end up with you losing a lot of $$$. On the flipside

learn the foundation of trading and these indicators will end up

making you a lot of $$$.

WHAT IS AN INDICATOR?

A trading indicator is exactly as the name suggests it is an

indication as to what MIGHT happen. There is no such thing as a perfect indicator that will always be right...unfortunately. That

being said there are indicators that are far more advanced and

utilise multiple different conditions to help identify a very strong

suggestion of what might happen...you are about to see 5.

ADDING THE INDICATOR

- Create an Account with TradingView

- Open ANY Cryptocurrency chart

- Select Indicators

- Open “Invite-Only” Option

- Add simply by clicking any of the ALPHA indicators

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Indicator Settings

All settings are customisable although the default settings are tried

and tested of many trading scenarios that have proven to yield best

and most accurate results an automated system can offer

Colour-Coordinating

All indicators are designed for dark background charts because white

backgrounds are for FOREX, S & DINOSAURS (JOKING!) although if you

want to change the colours of any indicators then these are all

customisable to your preference in the settings - custom paint jobs

can be done on request….minimum payment of $1,000,000 per indicator….

D.Y.O.R

Do Your Own Research - In theory you can blindly follow signals and be successful be you will become WAY WAY more successful in trading

if you understand what & why you are entering certain trade set ups.

There is a lof of information in this guide with “light” explanations

on some of the foundations of trading analysis. Understanding the

basics and even the advanced techniques of some of the tools used in

these indicators will turn you from saving a few pennies for a rainy

day to owning a fleet of ‘Lambo’s or whatever floats your boat….like

a boat! So Do Your Own Research and never stop learning.

ALPHA FRAMEWORKS

ALPHAPRIME(Core)

The Alpha Prime is a multi-functional framework that is streamlined

to operate in a longer term (4hr+) swing format and a short-term

(5min and below) scalper style...at the flick of a switch.

i) SWING SETTING

This indicator is based around Support & Resistance, TD9

functionality - utilising Weekly & Monthly Pivot Points to support.

It is a clever algorithm is centred around breakouts and

dips/reversals. There is a clever background Wave Oscillator that

helps to target likely bottoms/dips and highlighted overbought/sold

regions.

Recommended Timeframe: 4hr, 1Day Recommended Supporting Indicators: Wave, TrendBreak, Volume, Momentiment

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Alerts:

1.0 - SWING - SWING ALERT - BreakOut // TD9 // Dip/Peak

1.1 - SWING - BULLISH SWING ALERT - 'BreakUp // Dip // Bullish TD9

1.2 - SWING - BEARISH SWING ALERT - BreakDown // Peak // Bearish TD9

FEATURES

OverBought/OverSold Zones

Support & Resistance

Weekly/Monthly Pivots

Future Monthly Pivots

Moving Averages

BreakOut Signals

TD9 Signals

Dip/Peak Signals

OverBought/OverSold Zones

These highlighted zones are derived from the ALPHA Prime indicating

when the “Cloud” of MFI’s, RSI’s, Stoch are heavily

oversold/overbought indicating an incoming reversal

Support & Resistance

Support is a price level where a downtrend can be expected to pause

due to a concentration of demand or buying interest. As the price of

assets or securities drops, demand for the shares increases, thus

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forming the support line. Meanwhile, resistance zones arise due to

selling interest when prices have increased.

Once an area or "zone" of support or resistance has been identified,

those price levels can serve as potential entry or exit points

because, as a price reaches a point of support or resistance, it will

do one of two things—bounce back away from the support or resistance

level, or violate the price level and continue in its direction—until

it hits the next support or resistance level.

Weekly/Monthly Pivots

Pivot points are used by traders in equity and commodity exchanges. They're calculated based on the high, low, and closing prices of

previous trading sessions, and they're used to predict support and resistance levels in the current or upcoming session. These support and resistance levels can be used by traders to determine entry and

exit points, both for stop-losses and profit taking.

KEY TAKEAWAYS

● A pivot point is a technical analysis indicator, or

calculations, used to determine the overall trend of the market

over different time frames.

● The pivot point itself is simply the average of the high, low

and closing prices from the previous trading day.

Future Monthly Pivots

These are simply the current or future monthly pivot points - they

determine a good idea of the future movement.

Moving Averages

Moving average is a simple, technical analysis tool. Moving averages

are usually calculated to identify the trend direction of a or to

determine its support and resistance levels. It is a

trend-following—or lagging —indicator because it is based on past prices.

The longer the time period for the moving average, the greater the

lag. So, a 200-day moving average will have a much greater degree of

lag than a 20-day MA because it contains prices for the past 200

days. The 50-day and 200-day moving average figures for s are widely

followed by investors and traders and are considered to be important

trading signals . Moving averages are a totally customizable indicator, which means

that an investor can freely choose whatever time frame they want when

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calculating an average. The most common time periods used in moving

averages are 15, 20, 30, 50, 100, and 200 days. The shorter the time

span used to create the average, the more sensitive it will be to

price changes. The longer the time span, the less sensitive the

average will be.

Investors may choose different time periods of varying lengths to

calculate moving averages based on their trading objectives. Shorter

moving averages are typically used for short-term trading, while

longer-term moving averages are more suited for long-term investors.

There is no correct time frame to use when setting up your moving

averages. The best way to figure out which one works best for you is

to experiment with a number of different time periods until you find

one that fits your strategy.

Predicting trends in the market is no simple process. While it is

impossible to predict the future movement of a specific , using

technical analysis and research can help you make better predictions.

A rising moving average indicates that the security is in an uptrend , while a declining moving average indicates that it is in a downtrend . Similarly, upward momentum is confirmed with a bullish crossover , which occurs when a short-term moving average crosses above a

longer-term moving average. Conversely, downward momentum is

confirmed with a bearish crossover, which occurs when a short-term

moving average crosses below a longer-term moving average

BreakOut Signals

These are simply indications of the price breaking up through

resistance or down through support - there is a large amount of back

ground algorithm to help filter these into very simple and strong

signals

A breakout refers to when the price of an asset moves above a

resistance area, or moves below a support area. Breakouts indicate the potential for the price to start trending in the breakout direction. For example, a breakout to the upside from a chart pattern could indicate the price will start trending higher. Breakouts that

occur on high volume (relative to normal volume) show greater conviction which means the price is more likely to trend in that

direction.

KEY TAKEAWAYS

● A breakout is when the price moves above a resistance level or

moves below a support level.

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● Breakouts can be subjective since not all traders will

recognize or use the same support and resistance levels.

● Breakouts provide possible trading opportunities. A breakout to

the upside signals traders to possible get long or cover short

positions. A breakout to the downside signals traders to

possibly get short or to sell long positions.

● Breakouts with relatively high volume show conviction and

interest, and therefore the price is more likely to continue

moving in the breakout direction.

● Breakouts on low relative volume are more prone to failure, so

the price is less likely to trend in the breakout direction.

What Does a Breakout Tell You?

A breakout occurs because the price has been contained below a

resistance level or above a support level, potentially for some time.

The resistance or support level becomes a line in the sand which many

traders use to set entry points or stop loss levels . When the price breaks through the support or resistance level traders waiting for

the breakout jump in, and those who didn't want the price to breakout

exit their positions to avoid larger losses.

TD9 Signals

Indicator Logic

When the price reaches the trigger condition for 9 consecutive days

in the process of rising or falling, the series 1, 2, 3… 7, 8, 9 will

be generated, and the series will be marked above (below) the

candlestick chart of the day. Only when the price reaches the

trigger condition for the sixth consecutive day, the series will

start to display, showing 1, 2, 3, 4, 5, 6 in turn. When the price

still reaches the trigger condition on the seventh day, it will

display 7. If the trigger condition is not met on the seventh day,

the serial number of the previous six days will disappear. The

display logic of the eighth day is the same as that of the seventh

day. When the trigger condition is still reached on the ninth day, a

nine turn structure (sequence) is formed. When the trigger condition

is not reached on the ninth day, the serial number of the first eight

days disappears and the nine turn structure does not hold. The nine

turn structure formed in the process of price rising is called up 9

structure, while the nine turn structure formed in the process of

price falling is called down 9 structure.

Trading Tactics

The core use of the magic 9 turn index is to help us effectively

escape the top area of the and accurately grasp the bottom

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opportunity of the . When the price rises 9 structures in the

process of operation, the price is often located in the top reversal

area, and individuals are likely to face the risk of reversal and

decline. At this time, we should reduce the position to avoid the

risk. When the price falls 9 structure, the price tends to be in

the bottom reversal area, and individuals are likely to start the

trend of stopping falling and rebounding. At this time, we can

consider building positions or increasing positions to obtain the

excess profits brought by the rise of prices.

Keep in Mind:

1. As a technical index, magic 9 can not be regarded as the judgment

basis of buying and selling s arbitrarily, but should be combined

with the fundamental and other technical indicators for comprehensive

analysis.

2. In the process of strong rise (fall) of price, 9-up (down)

structure may be formed continuously. At this time, the use strategy

of magic nine turn should be changed, and the first up (down) 9

structure should be regarded as a signal to strengthen the market

start (down).

3. The magic nine turn technical indicators superimpose the bottom

deviation (top deviation) and other signals for secondary

confirmation, which is more able to determine the reversal of the

trend.

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BreakOut’s

The custom algo does a lot of the work a basic strategy is, when a

signal fires:

2 Entry Points

1 > At close of candle of signal

2 > At Resistance or Support that has been broken

Optional Take Profits

TP 1 is next Fibonacci Level or Support/Resistance

TP2 is following Fibonacci Level or Support/Resistance

Stop-Loss is direct support/resistance or identified swing low/high

Dip/Peak

Exceptionally strong in the concurrent trending market ie. a dip

signal forming during an uptrend, although due to the refined algo

they are strong in the opposing market. Use in conjunction with the

ALPHA Wave for best understanding. See more in depth details there.

Utilise overbought/oversold signs from the ALPHA Wave and Divergences

to support and add strength to the reversal potential.

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TD9

What is a TD sequential indicator?

Number indicator used to identify a price point where an uptrend or a

downtrend exhausts itself and reverses. It gives you a recommendation

where to buy and where to sell.

What are we looking at?

A series of nine candles where each close higher/lower than its 4th

predecessor candle’s close value.

When is there a buy recommendation?

When you see 9 consecutive closes “lower” than the close 4 bars

prior.

An ideal buy is when the low of bars 6 and 7 in the count are

exceeded by the low of bars 8 or 9.

When is there a sell recommendation?

● When you see 9 consecutive closes “higher” than the close 4

candles prior.

● An ideal sell is when the the high of bars 6 and 7 in the count

are exceeded by the high of bars 8 or 9.

Support/Resistance zones add strong confluence to confirm incoming

reversals.

ii) SCALPER SETTING

This is the second setting to the ALPHA Prime - signals and framework

is refined to operate most effectively in scalping setups.

This as the name suggests is a framework and alerts created

specifically for the support of scalping in the very low timeframes.

It gives a very sharp read of the direction of the trend whilst

trying to catch the important reversals. It shares duality with the

ALPHA PullBack in the Support & Resistance lines that are critical

within Scalping. The core signal is a confluence of multiple

directional and price action background indicators to give the best

chance of providing a signal of the trending direction - although be

warned false signals do happen so you have to be alert to catch them!

It is advised to always work with dual charts with a higher time

frame at 1hr+ to follow the bigger picture. It is helpful to also be

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following the BTC movement too. Lots of screens, lots of eyes!

Remember this is scalping - targets are small, short and frequent.

Getting into a trade is quite easy but knowing when to get out is

key. There for look for identifiers such as hitting support of

resistances, hitting 200emas reentering into the bollinger bands or

entering into overbought/oversold zone.

Recommended Timeframe: 5min Recommended Supporting Indicators: Wave, Momentiment, Volume, TrendBreak

Alerts:

2.0 - SCALP - SCALP ALERT - Dip/Peak // TD9 // Trend Change

2.1 - SCALP - BULLISH SCALP ALERT - Peak // Bullish TD9 // Bullish

Trend Change

2.2 - SCALP - BEARISH SCALP ALERT - Peak // Bearish TD9 // Bearish

Trend Change

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FEATURES

Support & Resistance

OverBought/OverSold Zones

Bull/Bear TrendScalp Signals

Bollinger Band

Bollinger Band Squeeze

Moving Averages

Dip/Peak Signals

TD9 Signals

Support/Resistance

See Alpha Prime - Swing Setting

OverBought/OverSold Zones

These highlighted zones are derived from the ALPHA Prime indicating

when the “Cloud” of MFI’s, RSI’s, Stoch are heavily

oversold/overbought indicating an incoming reversal

Moving Averages

Be aware of the 200EMA as a key line of support/resistance there is a

helpful “cloud” that will give an instant indication of which way the

gerbera trend is Orange = bear, white = bull. The tighter moving

averages are based on 10 and 20 to give a quicker indication of trend

change but to also act as moving support and resistances, that are

very popular in these timeframes.

Bollinger Band & Squeeze

Integral to understanding Scalping - giving a clear indication of

volatility within the chart movement. Conduct extended learning on

the Bollinger Bands to truly understand them. Included is a strong

aid which will help instantly identify consolidation. This is when

the bands become “Squeezed” - commonly during consolidation it is

followed by a large movement. For this reason it is riskier to enter

bull or bear alerts during these consolidation periods - and best to

enter when exiting consolidation.

STRATEGIES

Bull/Bear Trend Signal

These signals are derived from multiple directional indicators and

price action to give technically the best chance for a continuation

in trend directions. These can be very short term or extended

depending on the strength of the trend. Be wary of false signals on

support or resistances and quick to react to changes to minimise

losses. Use in confluence with ALPHA Waves, ALPHA Volume, ALPHA

Momentum for further confirmations. ALPHA TrendBreak will help give

further active support and resistance Fibonacci lines and auto

updating trendlines.

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Dip/Peak

See Alpha Prime - Swing Setting

TD9 Signal

See Alpha Prime - Swing Setting

ALPHA TRENDBREAK (Support)

This is a support indicator to be used in confluence with other

indicators - it auto prints, trendlines along with Trendline breaks

to support with support and resistance breaks or key changes in trend

direction via ALPHA Momentum or Volume Breakouts. Fibonacci

Retracement is auto populated to a fixed lookback to add further

fibonacci support and resistance zones to help identify breakouts

and/or rejections. Finally the Zig-Zag lines are optimal for quickly

identifying standardised chart patterns (Research Chart Patterns and

Harmonics - very key to trading).

Recommended Timeframe: All Time Frames*

Recommended Supporting Indicators: ALPHA Prime, ALPHA Momentiment, ALPHA Volume

Alerts: 1.0 - 1ST TRENDBREAK - 1st Trendline AND Support/Resistance Break of

Sequence

1.2 - 1ST BULLISH TRENDBREAK - 1st Trendline AND Resistance Break of

Sequence

1.3 - 1ST BEARISH TRENDBREAK - 1st Trendline AND Support Break of

Sequence

2.1 - ALL TRENDBREAKS - All Trendline AND Support/Resistance Breaks

2.2 - ALL BULLISH TRENDBREAKS - All Trendline AND Resistance Breaks

2.3 - ALL BEARISH TRENDBREAKS - All Trendline AND Support Breaks

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FEATURES

ZIG-ZAG LINE

AUTO-TRENDLINES

AUTO-FIBONACCI

BREAKOUT CANDLES

SUPPORT/RESISTANCE BREAKS

TREND BREAKS

1ST BREAKOUTS

ZIG-ZAG LINE

What Is the Zig-Zag Line?

The Zig Zag line lowers the impact of random price fluctuations and

is used to help identify price trends and changes in price trends.

KEY TAKEAWAYS

● The Zig Zag indicator lowers the impact of random price

fluctuations and is used to identify price trends and changes

in price trends.

● The indicator lowers noise levels, highlighting underlying

trends higher and lower.

● The Zig Zag indicator works best in strongly trending markets.

Understanding the Zig Zag Indicator

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The Zig Zag indicator plots points on a chart whenever prices reverse

by a percentage greater than a pre-chosen variable. Straight lines

are then drawn, connecting these points.

The indicator is used to help identify price trends. It eliminates

random price fluctuations and attempts to show trend changes. Zig Zag

lines only appear when there is a price movement between a swing high and a swing low that is greater than a specified percentage—often 5%.

By filtering minor price movements, the indicator makes trends easier

to spot in all time frames.

The Zig Zag indicator is often used in conjunction with Elliot Wave Theory to determine the positioning of each wave in the overall cycle. Traders can experiment with different percentage settings to

see what gives the best results. For example, a setting of 4% may

define waves more clearly than a setting of 5%. Stocks have their own

patterns, so it is likely that traders will need to optimize the Zig

Zag indicator’s percentage setting to suit those securities .

Although the Zig Zag indicator does not predict future trends, it

helps to identify potential support and resistance zones between plotted swing highs and swing lows. Zig-Zag lines can also reveal

reversal patterns, i.e. double bottoms and head and shoulders tops. Traders can use popular technical indicators such as the relative

strength index (RSI) and the stochastics oscillator to confirm

whether the price of a security is overbought or oversold when the

Zig-Zag line changes direction.

A momentum investor might use the indicator to stay in a trade until the Zig-Zag line confirms in the opposite direction. For example, if

the investor holds a long position , they would not sell until the Zig-Zag line turns downward.

AUTO-TRENDLINES

What Is a Trendline?

Trendlines are easily recognizable lines that traders draw on charts

to connect a series of prices together or show some data's best fit.

The resulting line is then used to give the trader a good idea of the

direction in which an investment's value might move.

A trendline is a line drawn over pivot highs or under pivot lows to

show the prevailing direction of price. Trendlines are a visual

representation of support and resistance in any time frame. They show

direction and speed of price, and also describe patterns during

periods of price contraction.

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KEY TAKEAWAYS

● Trendlines indicate the best fit of some data using a single

line or curve.

● A single trendline can be applied to a chart to give a clearer

picture of the trend.

● Trendlines can be applied to the highs and the lows to create a

channel.

● The time period being analyzed and the exact points used to

create a trendline vary from trader to trader.

What Do Trendlines Tell You?

The trendline is among the most important tools used by technical

analysts. Instead of looking at past business performance or other

fundamentals , technical analysts look for trends in price action . A trendline helps technical analysts determine the current direction in

market prices. Technical analysts believe the trend is your friend,

and identifying this trend is the first step in the process of making

a good trade.

To create a trendline, an analyst must have at least two points on a

price chart. Some analysts like to use different time frames such as

one minute or five minutes. Others look at daily charts or weekly charts. Some analysts put aside time altogether, choosing to view

trends based on tick intervals rather than intervals of time. What makes trendlines so universal in usage and appeal is they can be used

to help identify trends regardless of the time period, time frame or

interval used.

If company A is trading at $35 and moves to $40 in two days and $45

in three days, the analyst has three points to plot on a chart, starting at $35, then moving to $40, and then moving to $45. If the

analyst draws a line between all three price points, they have an

upward trend. The trendline drawn has a positive slope and is

therefore telling the analyst to buy in the direction of the trend.

If company A's price goes from $35 to $25, however, the trendline has

a negative slope and the analyst should sell in the direction of the

trend.

Example Using a Trendline

Trendlines are relatively easy to use. A trader simply has to chart

the price data normally, using open, close, high and low. Below is

data for the Russell 2000 in a candlestick chart with the trendline applied to three session lows over a two month period.

The trendline shows the uptrend in the Russell 2000 and can be

thought of as support when entering a position. In this case, trader

may choose to enter a long position near the trendline and then

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extend it into the future. If the price action breaches the trendline

on the downside, the trader can use that as a signal to close the

position. This allows the trader to exit when the trend they are

following starts to weaken.

Trendlines are, of course, a product of the time period. In the

example above, a trader doesn't need to redraw the trendline very

often. On a time scale of minutes, however, trendlines and trades may

need to be readjusted frequently.

The Difference Between Trendlines and Channels

More than one trendline can be applied to a chart. Traders often use

a trendline connecting highs for a period as well as another to

connect lows in order to create channels . A channel adds a visual representation of both support and resistance for the time period

being analyzed. Similar to a single trendline, traders are looking

for a spike or a breakout to take the price action out of the channel. They may use that breach as an exit point or an entry point

depending on how they are setting up their trade.

Limitations of a Trendline

Trendlines have limitations shared by all charting tools in that they

have to be readjusted as more price data comes in. A trendline will

sometimes last for a long time, but eventually the price action will

deviate enough that it needs to be updated. Moreover, traders often

choose different data points to connect. For example, some traders

will use the lowest lows, while others may only use the lowest

closing prices for a period. Last, trendlines applied on smaller time

frames can be volume sensitive. A trendline formed on low volume may

easily be broken as volume picks up throughout a session.

AUTO-FIBONACCI LEVELS

What are Fibonacci Extensions?

Fibonacci extensions are a tool that traders can use to establish

profit targets or estimate how far a price may travel after a retracement/ pullback is finished. Extension levels are also possible areas where the price may reverse.

Extensions are drawn on a chart, marking price levels of possible

importance. These levels are based on Fibonacci ratios (as percentages) and the size of the price move the indicator is being

applied to.

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KEY TAKEAWAYS

● Common Fibonacci extension levels are 61.8%, 100%, 161.8%,

200%, and 261.8%.

● The Fibonacci extensions show how far the next price wave could move following a pullback.

● Fibonacci ratios are common in everyday life, seen in galaxy

formations, architecture, as well as how some plants grow.

Therefore, some traders believe these common ratios may also

have significance in the financial markets.

● Extension levels signal possible areas of importance, but

should not be relied on exclusively.

The Formula For Fibonacci Extensions

Fibonacci extensions don't have a formula. When the indicator is

applied to a chart the trader chooses three points. Once the three

points are chosen, the lines are drawn at percentages of that move.

The first point chosen is the start of a move, the second point is

the end of a move, and the third point is the end of the retracement against that move. The extensions then help project where the price

could go next.

How to Calculate Fibonacci Retracement Levels

1. Multiply the difference between points one and two by any of

the ratios desired, such as 1.618 or 0.618. This gives you a

dollar amount.

2. If projecting a price move higher, add the dollar amount above

to the price at point three. If projecting a price move lower,

subtract the dollar amount from step one from the price at

point three.

For example, if the price moves from $10 to $20, back to $15, $10

could be point one, $20 point two, and $15 point three. The Fibonacci

levels will then be projected out above $15, providing levels to the

upside of where the price could go next. If instead, the price drops,

the indicator would need to be redrawn to accommodate the lower price

at point three.

If the price rises from $10 to $20, and these two price levels are

points one and two used on the indicator, then the 61.8% level will

be $6.18 (0.618 x $10) above the price chosen for point three. In

this case, point three is $15, so the 61.8% extension level is $21.18

($15 + $6.18). The 100% level is $10 above point three for an

extension level of $25 ((1.0 x $10) + 15).

The ratios themselves are based on something called the Golden Ratio .

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To learn about this ratio, start a sequence of numbers with zero and

one, and then add the prior two numbers to end up with a number

string like this:

0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610, 987...

The Fibonacci extension levels are derived from this number string.

Excluding the first few numbers, as the sequence gets going, if you

divide one number by the prior number, you get a ratio approaching

1.618, such as dividing 233 by 144. Divide a number by two places to

the left and the ratio approaches 2.618. Divide a number by three to

the left and the ratio is 4.236.

The 100% and 200% levels are not official Fibonacci numbers, but they

are useful since they project a similar move (or a multiple of it) to

what just happened on the price chart.

What Do Fibonacci Extensions Tell You?

Fibonacci extensions are a way to establish price targets or find

projected areas of support or resistance when the price is moving

into an area where other methods of finding support or resistance are

not applicable or evident.

If the price moves through one extension level, it may continue

moving toward the next. That said, Fibonacci extensions are areas of

possible interest. The price may not stop and/or reverse right at the level, but the area around it may be important. For example, the

price may move just past the 1.618 level, or pull up just shy of it,

before changing directions.

If a trader is long on a stock and a new high occurs, the trader can use the Fibonacci extension levels for an idea of where the stock may

go. The same is true for a trader who is short . Fibonacci extension levels can be calculated to give the trader ideas on profit target

placement. The trader then has the option to decide whether to cover

the position at that level.

Fibonacci extensions can be used for any timeframe or in any market.

Typically, clusters of Fibonacci levels indicate a price area that will be significant for the stock, and also for traders in their

decision making. Since extension levels can be drawn on different

price waves over time, when multiple levels from these different

waves converge at one price, that could be a very important area.

The Difference Between Fibonacci Extensions and Fibonacci

Retracements

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While extensions show where the price will go following a

retracement, Fibonacci retracement levels indicate how deep a retracement could be. In other words, Fibonacci retracements measure

the pullbacks within a trend, while Fibonacci extensions measure the

impulse waves in the direction of the trend

STRATEGIES

1ST BREAKOUT SIGNALS

A combination of a break down of Support and a breakthrough of a

notable trendline being the first in the sequence until the next

opposing Breakout signal. Indication of a notable long term trend

change.

ALL BREAKOUT SIGNALS

Similar to the above these will notify you of all combined breakouts

of notable trend lines and support/resistances. These will indicate

the continuation of trends.

HARMONICS

Utilising the Fibonacci levels, Trend lines and Zig-Zag it makes

reading Harmonics infinitely easier. An advanced technique brought on

by learning specific patterns that can be extremely strong for

trading set ups.

See the Chart Patterns in the Treaders Lounge at

www.blockpartytrading.com for a cheat sheet on the harmonic patterns.

Harmonic price patterns are those that take geometric price patterns

to the next level by utilizing Fibonacci numbers to define precise turning points. Unlike other more common trading methods, harmonic

trading attempts to predict future movements.

Let's look at some examples of how harmonic price patterns are used

to trade currencies in the forex market .

KEY TAKEAWAYS

● Harmonic trading refers to the idea that trends are harmonic

phenomena, meaning they can subdivided into smaller or larger

waves that may predict price direction.

● Harmonic trading relies on Fibonacci numbers, which are used to

create technical indicators.

● The Fibonacci sequence of numbers, starting with zero and one,

is created by adding the previous two numbers: 0, 1, 1, 2, 3,

5, 8, 13, 21, 34, 55, 89, 144, etc.

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● This sequence can then be broken down into ratios which some

believe provide clues as to where a given financial market will

move to.

● The Gartley, bat, and crab are among the most popular harmonic

patterns available to technical traders.

Geometry and Fibonacci Numbers

Harmonic trading combines patterns and math into a trading method

that is precise and based on the premise that patterns repeat

themselves. At the root of the methodology is the primary ratio, or

some derivative of it (0.618 or 1.618). Complementing ratios include:

0.382, 0.50, 1.41, 2.0, 2.24, 2.618, 3.14 and 3.618. The primary

ratio is found in almost all natural and environmental structures and

events; it is also found in man-made structures. Since the pattern

repeats throughout nature and within society, the ratio is also seen

in the financial markets , which are affected by the environments and societies in which they trade.

By finding patterns of varying lengths and magnitudes, the trader can then apply Fibonacci ratios to the patterns and try to predict future

movements. The trading method is largely attributed to Scott Carney, 1 although others have contributed or found patterns and levels that

enhance performance.

Issues with Harmonics

Harmonic price patterns are precise, requiring the pattern to show

movements of a particular magnitude in order for the unfolding of the

pattern to provide an accurate reversal point. A trader may often see a pattern that looks like a harmonic pattern, but the Fibonacci

levels will not align in the pattern, thus rendering the pattern

unreliable in terms of the harmonic approach. This can be an

advantage, as it requires the trader to be patient and wait for ideal

set-ups.

Harmonic patterns can gauge how long current moves will last, but

they can also be used to isolate reversal points. The danger occurs

when a trader takes a position in the reversal area and the pattern

fails. When this happens, the trader can be caught in a trade where

the trend rapidly extends against them. Therefore, as with all

trading strategies, risk must be controlled.

It is important to note that patterns may exist within other

patterns, and it is also possible that non-harmonic patterns may (and

likely will) exist within the context of harmonic patterns. These can

be used to aid in the effectiveness of the harmonic pattern and

enhance entry and exit performance. Several price waves may also exist within a single harmonic wave (for instance, a CD wave or AB

wave). Prices are constantly gyrating; therefore, it is important to

focus on the bigger picture of the time frame being traded. The

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fractal nature of the markets allows the theory to be applied from the smallest to largest time frames.

To use the method, a trader will benefit from a chart platform that

allows them to plot multiple Fibonacci retracements to measure each wave.

Types of Harmonic Patterns

There is quite an assortment of harmonic patterns, although there are

four that seem most popular. These are the Gartley , butterfly , bat, and crab patterns.

The Gartley

The Gartley was originally published by H.M. Gartley in his book

Profits in the Stock Market2 and the Fibonacci levels were later added by Scott Carney in his book The Harmonic Trader. 3 The levels discussed below are from that book. Over the years, some other traders have

come up with some other common ratios. When relevant, those are

mentioned as well.

The bullish pattern is often seen early in a trend, and it is a sign the corrective waves are ending and an upward move will ensue following point D. All patterns may be within the context of a

broader trend or range and traders must be aware of that.

It's a lot of information to absorb, but this is how to read the

chart. We will use the bullish example. The price moves up to A, it

then corrects and B is a 0.618 retracement of wave A. The price moves

up via BC and is a 0.382 to 0.886 retracement of AB. The next move is

down via CD, and it is an extension of 1.13 to 1.618 of AB. Point D

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is a 0.786 retracement of XA. Many traders look for CD to extend 1.27

to 1.618 of AB.

The area at D is known as the potential reversal zone. This is where

long positions could be entered, although waiting for some confirmation of the price starting to rise is encouraged. A stop-loss

is placed not far below entry, although addition stop loss tactics

are discussed in a later section.

For the bearish pattern, look to short trade near D, with a stop loss

not far above.

The Butterfly

The butterfly pattern is different than the Gartley in that the

butterfly has point D extending beyond point X.

Here we will look at the bearish example to break down the numbers.

The price is dropping to A. The up wave of AB is a 0.786 retracement

of XA. BC is a 0.382 to 0.886 retracement of AB. CD is a 1.618 to

2.24 extension of AB. D is at a 1.27 extension of the XA wave. D is

an area to consider a short trade, although waiting for some confirmation of the price starting to move lower is encouraged. Place

a stop loss not far above.

With all these patterns, some traders look for any ratio between the

numbers mentioned, while others look for one or the other. For

example, above it was mentioned that CD is a 1.618 to 2.24 extension

of AB. Some traders will only look for 1.618 or 2.24, and disregard

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numbers in between unless they are very close to these specific

numbers.

The Bat

The bat pattern is similar to Gartley in appearance, but not in

measurement.

Let's look at the bullish example. There is a rise via XA. B retraces

0.382 to 0.5 of XA. BC retraces 0.382 to 0.886 of AB. CD is a 1.618

to 2.618 extension of AB. D is at a 0.886 retracement of XA. D is the

area to look for a long, although the wait for the price to start

rising before doing so. A stop loss can be placed not far below.

For the bearish pattern, look to short near D, with a stop loss not

far above.

The Crab

The crab is considered by Carney to be one of the most precise of the

patterns, providing reversals in extremely close proximity to what

the Fibonacci numbers indicate.

This pattern is similar to the butterfly, yet different in

measurement.

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In a bullish pattern, point B will pullback 0.382 to 0.618 of XA. BC will retrace 0.382 to 0.886 of AB. CD extends 2.618 to 3.618 of AB.

Point D is a 1.618 extension of XA. Take longs near D, with a stop

loss not far below.

For the bearish pattern, enter a short near D, with a stop loss not

far above.

Fine-Tune Entries and Stop Losses

Each pattern provides a potential reversal zone (PRZ), and not

necessarily an exact price. This is because two different projections

are forming point D. If all projected levels are within close

proximity, the trader can enter a position at that area. If the

projection zone is spread out, such as on longer-term charts where

the levels may be 50 pips or more apart, look for some other confirmation of the price moving in the expected direction. This

could be from an indicator, or simply watching price action .

A stop loss can also be placed outside the furthest projection. This

means the stop loss is unlikely to be reached unless the pattern

invalidates itself by moving too far.

The Bottom Line

Harmonic trading is a precise and mathematical way to trade, but it

requires patience, practice, and a lot of studies to master the

patterns. The basic measurements are just the beginning. Movements

that do not align with proper pattern measurements invalidate a

pattern and can lead traders astray.

The Gartley, butterfly, bat, and crab are the better-known patterns

that traders watch for. Entries are made in the potential reversal

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zone when price confirmation indicates a reversal, and stop losses

are placed just below a long entry or above a short entry, or

alternatively outside the furthest projection of the pattern.

ALPHA OSCILLATORS

ALPHA WAVE (Support)

The ALPHA Wave comes in 2 parts the “Cloud” and the “Wave” - The

“Cloud” consists of multiple RSI, MFI & Stoch indicators - its key

function it’s to follow the price action and momentum to help target

reliably when price is effectively oversold or overbought and

ultimately the highest chance of tops and bottoms of the markets. IT

can be used in confluence with any strategy to help identify when the

market is looking like a reversal. The “Wave” follows price movement

and momentum with multiple background indicators to help identify

incoming reversals included with the “Wave” contains Bullish and

Bearish Auto Divergence that will again add further confluence to

potential reversals.The base of this also functions in the background

of the ALPHA PPrime to give active alerts for them to help identify

reversals.

Recommended Timeframe: All Timeframes Recommended Supporting Indicators: ALPHA Prime, ALPHA Momentiment

Alerts:

1.1 - REVERSAL - REVERSAL

1.2 - BULLISH REVERSAL - BULLISH REVERSAL

1.3 - BEARISH REVERSAL - BEARISH REVERSAL

2.1 - TOP/BOTTOM - TOP/BOTTOM

2.2 - BOTTOM - BOTTOM

2.3 - TOP -TOP

3.1 - DIP/PEAK - DIP/PEAK

3.2 - DIP - BULLISH DIP

3.3 - PEAK - BEARISH PEAK

26

FEATURES

OVERSOLD/OVERBOUGHT SIGNALS

OVERSOLD/OVERBOUGHT ZONES

DIVERGENCES

ALPHA CLOUD

ALPHA WAVE

MFI WAVE

DIP/PEAK SIGNALS

THE “Cloud”

The wave is effectively a visual representation of the strength of

the price direction - when above 70 or below 30 - then these are key

areas for expected reversals. They are color coordinated to help

confirm the direction of and upcoming trend - white is bullish and

orange is bearish - so if you see a clear color appearing then there

may well be a trend change or continuation coming. Finally the

wider the wave becomes then this is suggesting that the price is

becoming overstretched and a quick reversal can be expected.

27

OVERBOUGHT/OVERSOLD

These alerts are essential giving a high chance of a market reversal

by identifying heavily overbought and oversold zones - these always

have a precursor of highlighted overbought/sold zones as preparation

for a reversal. It works similarly to the traditional overbought and

oversold strategies with the RSI (outlined below) although with far

more confluences to give a much stronger induction of reversal.

What Is the Relative Strength Index (RSI)?

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price

changes to evaluate overbought or oversold conditions in the price of

a stock or other asset. The RSI is displayed as an oscillator (a line

graph that moves between two extremes) and can have a reading from 0

to 100. The indicator was originally developed by J. Welles Wilder

Jr. and introduced in his seminal 1978 book, "New Concepts in

Technical Trading Systems."

Traditional interpretation and usage of the RSI are that values of 70

or above indicate that a security is becoming overbought or

overvalued and may be primed for a trend reversal or corrective pullback in price. An RSI reading of 30 or below indicates an oversold or undervalued condition.

KEY TAKEAWAYS

● The relative strength index (RSI) is a popular momentum

oscillator developed in 1978.

● The RSI provides technical traders signals about bullish and

bearish price momentum, and it is often plotted beneath the

graph of an asset's price.

● An asset is usually considered overbought when the RSI is above

70% and oversold when it is below 30%.

Calculation of the RSI

Using the formulas above, RSI can be calculated, where the RSI line

can then be plotted beneath an asset's price chart.

The RSI will rise as the number and size of positive closes increase,

and it will fall as the number and size of losses increase. The

second part of the calculation smooths the result, so the RSI will

only near 100 or 0 in a strongly trending market .

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As you can see in the above chart, the RSI indicator can stay in the

overbought region for extended periods while the stock is in an

uptrend . The indicator may also remain in oversold territory for a long time when the stock is in a downtrend . This can be confusing for new analysts, but learning to use the indicator within the context of

the prevailing trend will clarify these issues.

What Does RSI Tell You?

The primary trend of the stock or asset is an important tool in

making sure the indicator's readings are properly understood. For

example, well-known market technician Constance Brown, CMT, has

promoted the idea that an oversold reading on the RSI in an uptrend

is likely much higher than 30%, and an overbought reading on the RSI

during a downtrend is much lower than the 70% level. 1

As you can see in the following chart, during a downtrend, the RSI

would peak near the 50% level rather than 70%, which could be used by

investors to more reliably signal bearish conditions. Many investors

will apply a horizontal trendline that is between 30% and 70% levels when a strong trend is in place to better identify extremes.

Modifying overbought or oversold levels when the price of a stock or

asset is in a long-term, horizontal channel is usually unnecessary.

29

A related concept to using overbought or oversold levels appropriate

to the trend is to focus on trading signals and techniques that conform to the trend. In other words, using bullish signals when the

price is in a bullish trend and bearish signals when a stock is in a

bearish trend will help to avoid the many false alarms the RSI can

generate.

STRATEGIES

DIPS/PEAKS

With a key focus on the bespoke ALPHA Wave this is as simple as

notifying you of a potential reversal in a peak or dip. It can be

used in any market direction with the foundation of the MFI being

used as a trend filter, you don’t have to worry to much. Used in

confluences with divergences (See below) this can be an extremely

reliable tool. The signals will appear when it is heavily over

stretched although the reversals can be used outside of the signals,

again with confluence of Divergences and trend direction.

30

DIVERGENCES

Divergences are a very basic way of looking at Price movement and RSI

movement making a divergence in direction that often leads to a

reversal. It is always advised to follow the divergences that are

within the overbought and oversold zones to give a higher chance of

reversal. These do not carry specific alerts or signals but are used

to support other indicators.

Bullish divergences are, in essence, the opposite of bearish signals.

Despite their ease of use and general informational power, trading

oscillators tend to be somewhat misunderstood in the trading

industry, even considering their close relationship with momentum. At

its most fundamental level, momentum is actually a means of assessing

the relative levels of greed or fear in the market at a given point

in time.

Divergence Oscillators

Oscillators are most useful and issue their most valid trading

signals when their readings diverge from prices. A bullish divergence occurs when prices fall to a new low while an oscillator fails to

reach a new low. This situation demonstrates that bears are losing

power, and that bulls are ready to control the market again—often a

bullish divergence marks the end of a downtrend .

Bearish divergences signify potential downtrends when prices rally to

a new high while the oscillator refuses to reach a new peak. In this

situation, bulls are losing their grip on the market, prices are

rising only as a result of inertia, and the bears are ready to take

control again.

Classes of Divergences

Divergences, whether bullish or bearish in nature, have been

classified according to their levels of strength. The strongest

divergences are Class A divergences; exhibiting less strength are

Class B divergences; and the weakest divergences are Class C. The

best trading opportunities are indicated by Class A divergences,

while Class B and C divergences represent choppy market action and

should generally be ignored.

Class A bearish divergences occur when prices rise to a new high but

the oscillator can only muster a high that is lower than exhibited on

a previous rally. Class A bearish divergences often signal a sharp

and significant reversal toward a downtrend. Class A bullish divergences occur when prices reach a new low but an oscillator

reaches a higher bottom than it reached during its previous decline.

Class A bullish divergences are often the best signals of an

impending sharp rally .

31

Class B bearish divergences are illustrated by prices making a double top , with an oscillator tracing a lower second top. Class B bullish divergences occur when prices trace a double bottom, with an

oscillator tracing a higher second bottom.

Class C bearish divergences occur when prices rise to a new high but

an indicator stops at the very same level it reached during the

previous rally. Class C bullish divergences occur when prices fall to

a new low while the indicator traces a double bottom. Class C

divergences are most indicative of market stagnation —bulls and bears are becoming neither stronger nor weaker.

The Effect of Momentum and Rate of Change

With divergences, traders identify a rather precise point at which

the market's momentum is expected to change direction. But aside from

that precise moment, you must also ascertain the speed at which you

are approaching a potential shift in momentum. Market trends can

speed up, slow down or maintain a steady rate of progress. A leading

indicator that you can use to ascertain this speed is referred to as

the rate of change (RoC) . RoC compares today's closing price to a closing price X days ago, as chosen by the trader:

Momentum is positive if today's price is higher than the price of X

days ago, negative if today's price is lower and at zero if today's

price is the same. Using the momentum figure calculated, the trader

will then plot a slope for the line connecting calculated momentum

values for each day, thereby illustrating in linear fashion whether

momentum is rising or falling.

Similarly, the rate of change divides the latest price by a closing

price X days hence. If both values are equal, RoC is 1. If today's

price is higher, then RoC is greater than 1. And, if today's price is

lower, then RoC is less than 1. The slope of the line that connects

the daily RoC values graphically illustrates whether the rate of

change is rising or falling.

How to Use Momentum as a Trader

Whether calculating momentum or RoC, a trader must choose the time

window that they wish to use. As with most every oscillator, it is

generally a good rule of thumb to keep the window narrow. Oscillators are most useful in detecting short-term changes in the markets,

perhaps within a time frame of a week; while trend-following

indicators are better employed for longer-term trends.

When momentum or RoC rises to a new peak, the optimism of the market

is growing, and prices are likely to rally higher. When momentum or

32

RoC falls to a new low, the pessimism of the market is increasing,

and lower prices are likely coming.

When prices rise but momentum or RoC falls, a top is likely near.

This is an important signal to look for when locking in your profits

from long positions or tightening your protective stops . If prices hit a new high but momentum or RoC reaches a lower top, a bearish

divergence has occurred, which is a strong sell signal. The

corresponding bullish divergence is an obvious buy signal.

The Bottom Line

Divergent oscillators are powerful leading indicators that guide the

trader on not only the market's future direction but also its speed.

When combined with demonstrable divergences, momentum and RoC can

precisely ascertain near the moment a market shifts direction.

ALPHA Momentiment (Crutch)

A groundbreaking new indicator to measure the market sentiment

exclusively for Alt’s. This is measured using the BTC Dominance,

Total ALT Market Cap (Excluding BTC) and BTC Price to give a strong

idea of the overall market trend. One of the most powerful indicators

in the Crypto world let alone the ALPHA Suite toolbox.

The second part to this indicator is based around the very popular

MACD, the settings are based around the default settings for the

purpose that due to the popularity of the indicator there will be

many, many traders following the same movement you will be looking

at. In the background is a custom RSI and Volume based oscillator to

help confirm real trend changes and filter out the false ones.

Additionally MACD’s are also a common resource for spotting

divergences - this is not automated although heavily suggested to

learn to add additional confluences to your decisions. This is very

multi-functional across all timeframes although highly advised as a

support indicator and not to trade solely off, support and resistance

is key to avoiding false signals.

Recommended Timeframe: All Timeframes Recommended Supporting Indicators: ALPHA Prime, ALPHA Volume

Alerts:

0.1 - TREND CHANGE - TREND LONG OR TREND SHORT

0.2 - TREND LONG - TREND LONG

0.3 - TREND SHORT - TREND SHORT

33

Market Sentiment Change - A change in sentiment when there is a confluence of increasing/decreasing BTC.D, BTC Price & ALT Market Cap

in the shorter term conditions

ALT’s Increase - A change in sentiment when there is a confluence of increasing BTC.D, BTC Price & ALT Market Cap in the shorter term

conditions

ALT’s Decrease - A change in sentiment when there is a confluence of decreasing BTC.D, BTC Price & ALT Market Cap in the shorter term

conditions

Market Sentiment Big Change

ALT Season - A change in sentiment when there is a confluence of increasing BTC.D, BTC Price & ALT Market Cap in the short-term and

long-term conditions

ALT Dump - A change in sentiment when there is a confluence of decreasing BTC.D, BTC Price & ALT Market Cap in the short-term and

long-term conditions

Any Market Sentiment Change - Any of the above

Features:

ALT INCREASE/DECREASE

ALTSEASON/DUMP

MARKET SENTIMENT HEATMAP

MACD

VOLUME OSCILLATOR

34

MACD

The MACD is a very popular indicator - doing some wider reading and

learning will help elevate this indicator to a crutch perk.

Decreasing “humps” will signify upcoming trend changes before they

happen, spotting divergences is another key standard support

confluence with the MACD. As mentioned at the beginning of the guide,

this is a guide about the ALPHA indicators not a deep dive into these

old school indicators - do some further reading to fully understand

them.

What Is Moving Average Convergence Divergence (MACD)?

Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.

The result of that calculation is the MACD line. A nine-day EMA of

the MACD called the "signal line," is then plotted on top of the MACD

line, which can function as a trigger for buy and sell signals.

Traders may buy the security when the MACD crosses above its signal

line and sell—or short—the security when the MACD crosses below the

signal line. Moving average convergence divergence (MACD) indicators

can be interpreted in several ways, but the more common methods are

crossovers , divergences , and rapid rises/falls.

KEY TAKEAWAYS

● Moving average convergence divergence (MACD) is calculated by

subtracting the 26-period exponential moving average (EMA) from

the 12-period EMA.

● MACD triggers technical signals when it crosses above (to buy)

or below (to sell) its signal line.

● The speed of crossovers is also taken as a signal of a market

is overbought or oversold.

● MACD helps investors understand whether the bullish or bearish

movement in the price is strengthening or weakening.

MACD is calculated by subtracting the long-term EMA (26 periods) from

the short-term EMA (12 periods). An exponential moving average (EMA)

is a type of moving average (MA) that places a greater weight and significance on the most recent data points.

The exponential moving average is also referred to as the

exponentially weighted moving average. An exponentially weighted moving average reacts more significantly to recent price changes than

a simple moving average (SMA), which applies an equal weight to all observations in the period.

35

Learning From MACD

The MACD has a positive value (shown as the blue line in the lower

chart) whenever the 12-period EMA (indicated by the red line on the

price chart) is above the 26-period EMA (the blue line in the price

chart) and a negative value when the 12-period EMA is below the

26-period EMA. The more distant the MACD is above or below its

baseline indicates that the distance between the two EMAs is growing.

In the following chart, you can see how the two EMAs applied to the

price chart correspond to the MACD (blue) crossing above or below its

baseline (dashed) in the indicator below the price chart.

MACD is often displayed with a histogram (see the chart below) which graphs the distance between the MACD and its signal line. If the MACD

is above the signal line, the histogram will be above the MACD’s

baseline. If the MACD is below its signal line, the histogram will be below the MACD’s baseline. Traders use the MACD’s histogram to

identify when bullish or bearish momentum is high.

36

MACD vs. Relative Strength

The relative strength indicator (RSI) aims to signal whether a market

is considered to be overbought or oversold in relation to recent price levels. The RSI is an oscillator that calculates average price

gains and losses over a given period of time. The default time period

is 14 periods with values bounded from 0 to 100.

MACD measures the relationship between two EMAs, while the RSI

measures price change in relation to recent price highs and lows.

These two indicators are often used together to provide analysts a more complete technical picture of a market.

These indicators both measure momentum in a market, but, because they

measure different factors, they sometimes give contrary indications.

For example, the RSI may show a reading above 70 for a sustained

period of time, indicating a market is overextended to the buy side in relation to recent prices, while the MACD indicates the market is

still increasing in buying momentum. Either indicator may signal an

upcoming trend change by showing divergence from price (price

continues higher while the indicator turns lower, or vice versa).

Limitations of MACD

One of the main problems with divergence is that it can often signal

a possible reversal but then no actual reversal actually happens—it

37

produces a false positive. The other problem is that divergence

doesn't forecast all reversals. In other words, it predicts too many

reversals that don't occur and not enough real price reversals.

"False positive" divergence often occurs when the price of an asset

moves sideways, such as in a range or triangle pattern following a trend. A slowdown in the momentum—sideways movement or slow trending

movement—of the price will cause the MACD to pull away from its prior

extremes and gravitate toward the zero lines even in the absence of a

true reversal.

Additional MACD Resources

Are you interested in using MACD for your trades? Check out our own

primer on the MACD and Spotting Trend Reversals with MACD for more information.

If you'd like to learn about more indicators, Investopedia's

Technical Analysis Course provides a comprehensive introduction to the subject. You'll learn basic and advanced technical analysis,

chart reading skills, technical indicators you need to identify, and

how to capitalize on price trends in over five hours of on-demand

video, exercises, and interactive content.

Example of MACD Crossovers

As shown on the following chart, when the MACD falls below the signal

line, it is a bearish signal that indicates that it may be time to

sell. Conversely, when the MACD rises above the signal line, the

indicator gives a bullish signal, which suggests that the price of

the asset is likely to experience upward momentum. Some traders wait

for a confirmed cross above the signal line before entering a

position to reduce the chances of being "faked out" and entering a

position too early.

Crossovers are more reliable when they conform to the prevailing

trend. If the MACD crosses above its signal line following a brief

correction within a longer-term uptrend, it qualifies as bullish

confirmation.

38

If the MACD crosses below its signal line following a brief move

higher within a longer-term downtrend, traders would consider that a

bearish confirmation.

Example of Divergence

When the MACD forms highs or lows that diverge from the corresponding

highs and lows on the price, it is called a divergence. A bullish

divergence appears when the MACD forms two rising lows that

correspond with two falling lows on the price. This is a valid

bullish signal when the long-term trend is still positive.

Some traders will look for bullish divergences even when the

long-term trend is negative because they can signal a change in the

trend, although this technique is less reliable.

39

When the MACD forms a series of two falling highs that correspond

with two rising highs on the price, a bearish divergence has been

formed. A bearish divergence that appears during a long-term bearish

trend is considered confirmation that the trend is likely to

continue.

Some traders will watch for bearish divergences during long-term

bullish trends because they can signal weakness in the trend.

However, it is not as reliable as a bearish divergence during a

bearish trend.

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Example of Rapid Rises or Falls

When the MACD rises or falls rapidly (the shorter-term moving average

pulls away from the longer-term moving average), it is a signal that

the security is overbought or oversold and will soon return to normal levels. Traders will often combine this analysis with the relative strength index (RSI) or other technical indicators to verify overbought or oversold conditions.

41

It is not uncommon for investors to use the MACD’s histogram the same

way they may use the MACD itself. Positive or negative crossovers,

divergences, and rapid rises or falls can be identified on the

histogram as well. Some experience is needed before deciding which is

best in any given situation because there are timing differences

between signals on the MACD and its histogram.

Frequently Asked Questions

How do traders use moving average convergence divergence (MACD)?

Traders use MACD to identify changes in the direction or severity of

a stock’s price trend. MACD can seem complicated at first glance,

since it relies on additional statistical concepts such as the

exponential moving average (EMA). But fundamentally, MACD helps

traders detect when the recent momentum in a stock’s price may signal

a change in its underlying trend. This can help traders decide when

to enter, add to, or exit a position.

Is MACD a leading indicator, or a lagging indicator?

MACD is a lagging indicator. After all, all of the data used in MACD

is based on the historical price action of the stock. Since it is

based on historical data, it must necessarily “lag” the price.

However, some traders use MACD histograms to predict when a change in

trend will occur. For these traders, this aspect of the MACD might be

viewed as a leading indicator of future trend changes.

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What is a MACD positive divergence?

A MACD positive divergence is a situation in which the MACD does not

reach a new low, despite the fact that the price of the stock reached

a new low. This is seen as a bullish trading signal—hence, the term

“positive divergence.” If the opposite scenario occurs—the stock

price reaching a new high, but the MACD failing to do so—this would

be seen as a bearish indicator and referred to as a negative

divergence.

MARKET SENTIMENT

MARKET SENTIMENT HEATMAP

In a nutshell it is simply a visual representation in indicator

format of the above infographic.

Based on a long and short term trend analysis of BTC Dominance, BTC

Price and Total ALT Market Cap. Quite simply the lighter the zone the

more bullish the market sentiment and the darker the zone the more

bearish market sentiment.

ALT INCREASE/DECREASE VS ALTSEASON/DUMP

The ALT Increase and Decrease signals are a more immediate signal of

market sentiment change and the ALT Season and ALT Dump are

confirmations of longer term and short term market sentiment changes.

These confirmation are based on BTC Price , Total Alt MArket Cap

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increasing and BTC Dominance decreasing.

STRATEGIES

Bullish/Bearish Momentum

When the Market is signalling an Increase/Decrease or ALTSeason/DUMP

then it is time to use in confluence with any of the other indicators

when the fire signals of a converging signal. For example If we are

being signalled of an ALT Season prior to an ALT Decrease - during

this period if there is a Bullish PullBack Signal from the PullBack

Script then there is confirmation of volume flowing into the overall

ALT Market with a bullish entry signal.

This is best advised to check on both the 4hr and 1 Day timeframe for

the strongest confirmations of immediate and long term trends.

Volume Driven Trend Change Alerts

These alerts are derived from MACD crossover, Positive Volume and a

custom background RSI to help give several confluence on a highly

likely trend change. Most importantly filter out minor MACD

crossovers that can create A LOT of noise and false signals. Key

confluences to look out for are support & resistances be aware if a

bounce from support or resistance might occur, Fibonacci lines

Trendlines or or outside of Bollinger Bands .

ALPHA Volume (Support)

Volume is the foundation of everything in trading as this is simply

all of the buying and selling. Having a strong understanding of

volume will give you the edge in every single trading situation. The

advanced volume indicator helps identify confirmed changes in the

direction of buying or selling pressure. As well as continuation of

trends. The Volume moving average is another key identifier for

“Volume Breakouts'' although not as reliable - this can be learnt

more manually in looking for the Volume Trend Lines which help

identify consolidation periods, the moving average can be utilised in

the same way. After consolidation there is almost always a big

movement. IF you can identify that direction first using other

indicators then you will almost always catch a dump or pump.

Recommended Timeframe: 4hr, 1Day Recommended Supporting Indicators: ALL ALPHA’S

Alerts:

BULL OPPORTUNITY - Bullish Volume Breakout/Trend Change

BEAR OPPORTUNITY - Bearish Volume Breakout/Trend Change

BULL/BEAR OPPORTUNITY - Bullish & Bearish Volume Breakout/Trend

Change

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FEATURES

1ST IN SEQUENCE VOLUME SPIKE

VOLUME SPIKES

VOLUME

VOLUME MOVING AVERAGE

VOLUME

Trading volume is a measure of how much of a given financial asset has traded in a period of time. For stocks, volume is measured in the

number of shares traded and, for futures and options, it is based on

how many contracts have changed hands. The numbers, and other

indicators that use volume data, are often provided with online charts .

Looking at volume patterns over time can help get a sense of the

strength or conviction behind advances and declines in specific

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stocks and entire markets. The same is true for options traders, as trading volume is an indicator of an option's current interest. In fact, volume plays an important role in technical analysis and

features prominently among some key technical indicators.

KEY TAKEAWAYS

● Volume measures the number of shares traded in a stock or

contracts traded in futures or options.

● Volume can be an indicator of market strength, as rising

markets on increasing volume are typically viewed as strong and

healthy.

● When prices fall on increasing volume, the trend is gathering

strength to the downside.

● When prices reach new highs (or no lows) on decreasing volume,

watch out; a reversal might be taking shape.

● On Balance Volume and Klinger Indicator are examples of

charting tools that are based on volume.

How To Use Volume To Improve Your Trading

Basic Guidelines for Using Volume

When analyzing volume, there are usually guidelines used to determine

the strength or weakness of a move. As traders, we are more inclined

to join strong moves and take no part in moves that show weakness—or

we may even watch for an entry in the opposite direction of a weak move. These guidelines do not hold true in all situations, but they

offer general guidance for trading decisions.

1. Trend Confirmation

A rising market should see rising volume. Buyers require increasing

numbers and increasing enthusiasm in order to keep pushing prices

higher. Increasing price and decreasing volume might suggest a lack

of interest, and this is a warning of a potential reversal . This can be hard to wrap your mind around, but the simple fact is that a price

drop (or rise) on little volume is not a strong signal. A price drop

(or rise) on large volume is a stronger signal that something in the

stock has fundamentally changed.

2. Exhaustion Moves and Volume

In a rising or falling market, we can see exhaustion moves. These are generally sharp moves in price combined with a sharp increase in

volume, which signals the potential end of a trend. Participants who

waited and are afraid of missing more of the move pile in at market

tops , exhausting the number of buyers.

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At a market bottom , falling prices eventually force out large numbers of traders, resulting in volatility and increased volume. We will see a decrease in volume after the spike in these situations, but how

volume continues to play out over the next days, weeks, and months

can be analyzed using the other volume guidelines.

3. Bullish Signs

Volume can be useful in identifying bullish signs. For example, imagine volume increases on a price decline and then the price moves

higher, followed by a move back lower. If the price on the move back

lower doesn't fall below the previous low, and volume is diminished

on the second decline, then this is usually interpreted as a bullish

sign.

4. Volume and Price Reversals

After a long price move higher or lower, if the price begins to range

with little price movement and heavy volume, this might indicate that

a reversal is underway, and prices will change direction.

5. Volume and Breakouts vs. False Breakouts

On the initial breakout from a range or other chart pattern, a rise in volume indicates strength in the move. Little change in volume or

declining volume on a breakout indicates a lack of interest and a

higher probability for a false breakout.

6. Volume History

Volume should be looked at relative to recent history. Comparing

today to volume 50 years ago might provide irrelevant data. The more

recent the data sets, the more relevant they are likely to be.

Volume is often viewed as an indicator of liquidity, as stocks or

markets with the most volume are the most liquid and considered the

best for short-term trading; there are many buyers and sellers ready

to trade at various prices.

The Bottom Line

Volume is a handy tool to study trends, and as you can see, there are

many ways to use it. Basic guidelines can be used to assess market

strength or weakness, as well as to check if volume is confirming a

price move or signaling that a reversal might be at hand. Indicators

based on volume are sometimes used to help in the decision process.

In short, while volume is not a precise tool, entry and exit signals

can sometimes be identified by looking at price action , volume, and a volume indicator.

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VOLUME MOVING AVERAGE

This is essentially as it suggests - a moving average that runs

through the volume - this is a great for confirming volume breakouts

alongside support/resistances or trendline breakouts.

STRATEGIES

1ST IN SEQUENCE VOLUME SPIKE

These are signified by either the highlighted volume bars as volume

breakouts although you will only be alerted by the first change in

trend in volume breakout on each cycle, these have proven to be more

consistently reliable although all volume breakouts can offer a great

entry point for strong trend continuation. Utilise these in

conjunction with breakouts through the Volume Moving Average or self

drawn Trend Lines on the Volume (Slightly more advanced but extremely

basic and easy to learn - it is advised to do wider reading into the

Volume)

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WELCOME

TO

THE

PARTY!

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