Rsi Bamm

[dumbass]

i will post a few examples of this set up and a bit of background

this is basically linking a pattern set up and an rsi divergence to provide a trading opportunity

the first step is in analysing the indicator rather than the price pattern to validate the set up

I will take it step by step approach with audusd which is bearish rsi bamm

STEP 1

identify rsi reading in overbought zone of greater than 70 reading

STEP 2

observe a complex m pattern in overbought and a retracement out of overbought zone testing 50 reading as absolute minimum

[dumbass]

STEP 3

define rsi trigger price . this will detemine the price you will short at as the rsi comes out of overbought , identify the associated candlestick and observe highest price of that candlestick

[dumbass]

STEP 4

THE MOST CRITICAL ASPECT is after swing high has printed (x point ) price declines with rsi and rsi tests at least 50 level or below

STEP 5

price and rsi rally into overbought again the rsi must print a spike reversal then short trigger price can be executed

[dumbass]

the overall chart has us currently short at 88.67

[dumbass]

the key element of this pattern is the rsi divergence in relation to price so very much

relevant to alternate bats , butterflys and crabs

arco raised a point that this could morph into a butterfly , carney has a theory on this

if trigger candle is the high of x point then will most likely be a butterfly however if candle

is 2nd 3 rd or 4 th from x point high more likely to be 113 ( alternat bat )

well people the proof is in the pips so lets us watch

will post stop loss stuff after evening refreshments have been indulged

[roddy]

Hi DB,

Are you currently short or waiting for the rsi to pass through 50 before shorting

[dumbass]

hey rod

this is just a study trade , so definitley not trading but you should be short at trigger price

[peat]

have you calculated the IPO and the PPZ already ? and of course a SL.
oh and well done a good effort this thread
is the bamm described in the 3rd volume?

[arco]

Peat

You can get Bamm for free on Carneys site I believe.....http://www.harmonictrader.com/rsibamm.htm

Well done DB.....interesting thread.

arco

[arco]

I may be wrong here, but as I understand it, you wait for a confirming bullish W divergence on the RSI (see chart). Initially the RSI comes out of the OB zone above 30. You then wait until the action falls lower than the trigger candle and then reverses back through it to trigger a buy - also the next RSI reading should be in divergence. (see arrow)

Example here - Swissy. Trigger candle identified.
Buy at high of trigger candle once divergence is confirmed (day after red arrow).
Entry 1.1720. SL 1600

Short term profit potential was 57 pips. Current position if holding +14

Seems like it may have entry potential, especially when linked to a pattern like BF or Gartley. Although stops may need to be large in most cases.

GTA - arco

[dumbass]

evening peat , i will get back to you on stop loss considerations , im struggling to understand what carney is saying .

targets would be a review of price action at 382 of xd pattern, if favourable 618 and possible portion left to ride .

his profit protection i found was a bit subjective , trend line break , time considerations blah blah sounds good in a book but practically trading difficult to apply.

arco i think your pattern is not valid as x point rsi complex did not print in oversold < 30

also divergence on rsi is between x point and d point so i m not sure how you would apply to a gartley where you will not get price divergence and rsi
ie x point in a bulish gartley is lower than d point so cant apply divergence from complex rsi at xpoint to d point

[arco]

DB

Yeah, that must be an arco Bamm then..............add it as just another entry idea.
The bullish divergence is a Class A according to our pal Elder and a strong buy signal.

rgds - arco

[dumbass]

rsi bamm confirmation on swissy

X POINT prints W rsi pattern in oversold

pattern between x and d point rallied over 50

D POINT prints spike in oversold with DIVERGENCE

the problem is the long trigger is miles away at 11919

interesting though as a confirmation of the completed butterfly , i like entry that arco used

or to use break of oversold as roddy was suggesting

[dumbass]

also this is another small technical consideration which implies strength in reversal

note spike in rsi at d point is part of a w pattern but prints above oversold

a confirmation of pattern and implys an accelerated upside

[arco]

Although its not strictly Carney Bamm setup our Swissy entry long at 1720
has been up to a max of 88 pips so far.

We must be aware now of potential resistance from the support
areas of 6/8-13/9 and RSI centre line. Also there could be some inital
Gann resistance @ 1810.

GTA - arco

[roddy]

DB ARCO PEAT,

The standard you guys have been setting is really high,especially on entry on butterflies etc i tend to be a bit reckless and normally just enter on breakout after a few confirming candles! i just don't look at RSI as i had written indicators off as far as trading fx goes,but this BAMM thread has changed all that!this has to be one of the best fx forums around

cheers
roddy

[arco]

Morning All

Mentioned yesterday..............We must be aware now of potential resistance from the support areas of 6/8-13/9 and RSI centre line. Also there could be some inital Gann resistance @ 1810.

Expected resistance was found bang on cue with the high being 1814.
Max availble pips..... 92............or longer term position +23 (8.30am).

arco

[arco]

This current up-move may be a 5 wave impulse, so we look
for a 3 wave retrace - basic EW. (See chart)

Wave 3 is deemed to be the best wave to ride, so we can
consider pyramiding or instigating a new long position circa
wave 2 near C ? on the chart.

Starting at 'X' the plot may print a bullish butterfly near C ?, so somewhere
in the 1710-1720 region we could start to look for a potential reversal pattern.

GTA - arco

[arco]

Swissy update.
Our easy off Bamm trade reached +135 pips on the wild spike.
Some profits should have be gathered, with the balance now
at breakeven + 5.

The opportunity to add around 1720 didnt eventuate, (lowest 1731)....
and that is the difficulty with EW counting.....perhaps the ABC should have been
as the chart now shows below. I think that might be classed as an irregular or
expanding corrction.

http://www.tradersedgeindia.com/images/ew18.gif
Irregular Correction........In this type of correction, Wave B makes a new high. The final Wave C may drop to the beginning of Wave A, or below it.


Aussie.
The Carney Bamm has not followed through south on this one, although there was
an opportunity to grab some pips early on....... perhaps DB can do an update.

Good weekend all - arco

[dumbass]

morning all , yes i would agree this pattern has failed however i still feel its worth further study even on this set up.

the initial short position gave a maximum of 74 pips which applying normal trade techniques would have meant a few in the bag or worse case the ability to move stop loss to zero.
i would deem the most relevant number in the prz as the 113 sitting at 90.25
the pattern has shown some reactive harmonics in the prz (price bouncing off marked fib levels) which is positive.
so i would say i would have been stopped out at break even and waiting to review price around 90.25 if there was a reversal there the rsi would be in divergence at d point as well as divergence maintained on overall pattern.
so may still respect short trigger price of 8869 if price reversed and initiate another short position

[arco]

Swissy update.

Our easy off Bamm trade had an EOD close @ 1866.........giving +146 pips so far.

Some profits were gathered earlier (+100) on a portion of the trade, with the balance of the trade now at open + 75.

GTA - arco

[dumbass]

audusd yielding 105 pips from short off 113 at 90.25

RSI divergence on overall bamm pattern ( X POINT - D POINT )

RSI divergence at D POINT

dark cloud cover on dailys

so starting to look like something in this bamm pattern, i feel we have got to work at a more aggresive entry trigger as usd chf and aud usd both not giving an entry yet .
the set up on both aud usd and usd chf is identical.

what were adding on top of carney is the dual divergence which may just provide a bit more confirmation

[dumbass]

morning chaps

same rsi double divergence set up again

divergence in rsi between x point and d point

also divergence at d point.

stops to entry , half position on 618 target of pattern half on the trailer

[arco]

Hi DB

What charting package or broker are you using for that chart?

rgds - arco

[dumbass]

hi arco

saxobank

i still got this feeling the aussie is going to roll ,any thoughts

looking for a close below 8971 on daily candle for confirmation of top in place

[arco]

Hi DB

Currently the uptrend line is still intact, the red BF could still be in play, and IMO there hasnt been a confirmed reversal pattern for us to consider a serious short position.

Maybe tonight, maybe next week..........

I'm waiting for the market to come to me. When it does I can hitch a ride.

Enjoying the Bamm posts. Maybe they will work better on smaller time frames
with smaller pips.

rgds -arco

[dumbass]

morning chaps

same rsi double divergence set up again

divergence in rsi between x point and d point

also divergence at d point.

stops to entry , half position on 618 target of pattern half on the trailer


seems to be a good entry set up for smaller moves

collected 70 pips on target hit and 40 on trailer

i reckon more merit on lower time frames , hourlies etc