Logic and Application
- Leverage the breakout movement when price crosses the volume zone
- Logic is to take positions at the breakout point and ride the trend till reversal
- Recommended to apply for stock or index options with good volume and liquidity.
Steps to setup
- On 1 year duration chart , plot volume profile to mark the volume POC , High and Low levels
- Only If the price is above the VAH level or below the VAL level then it qualifies for next step
- On 1 hour time frame Heikin Ashi chart, using Moving average ribbon indicator plot 2 moving average lines , 30 MA High 30 MA Low which forms a MA channel
- If price crosses and closes above the 30 MA high line , it qualifies for buy position with SL being the MA low line
- Confirm the signal using Chandelier Exit indicator with 3,3 settings
Profit levels
- Profitable when Market remains in the direction of position taken
- Exit if personal target levels reached
- Exit at full profit on current expiry date
- Review and trail stop loss every day once as per personal profit gain levels
Loss
- Exit at personal Stop loss levels breach
- Exit signal of chandelier exit indicator
- Price reaches the lower MA line