TD COMBO
Sequential does a great job in identifying the tops/bottoms of the market but in some cases particularly in rapidly falling/rising markets another method called Combo does a great job in identifying tops/ bottoms. It is recommended that both Sequential and Combo may be monitored simultaneously. It is my experience that many times the Combo identifies a top/bottom but sequential count down 13 is not yet completed....then market goes in opposite direction for sometime and comes back to test the top/bottom and in this secondary test move, sequential gives a 13 count down buy/sell signal.
Sequential and Combo do not speak too often but when they speak, it is in our interest that we pay attention .
The combo differs from sequential in the following :
1) Set up in sequential and combo are same.....the only difference is sequential requires Intersection on 8th,9th or any subsequent bar whereas in combo there is no need for Intersection.
2) The count down in sequential can start earliest from 9th bar. In combo it starts from 1st bar provided the set up of minimum 9 bars is completed. The question is if we need 9 bars set up to be completed then how can combo countdown start from first bar of set up ?? The answer is simple....start counting count down from 1st set up bar after 9 bar set up is complete.
3) The Count down conditions of combo are different....they are as under
For COMBO BUY Count Down
a)For Buy combo count down, the close of the countdown bar is equal to or lesser than low of the bar 2 bars earlier.
b) Each Buy combo count down bar's low is lower than the low of previous bar.
c) Each successive Buy Combo count down day close is lesser than the previous count down bar's close . This condition obviously does not apply to Combo count down bar 1 as there is no previous count down bar before it.
d)The close also needs to be less than the previous bar's close.
For COMBO SELL Count Down
a)For Sell combo count down, the close of the countdown bar is equal to or greater than high of the bar 2 bars earlier.
b) Each Sell combo count down bar's high is higher than the high of previous bar.
c) Each successive Sell Combo count down bar's close is higher than the previous count down bars close. This condition obviously does not apply to Combo count down bar 1 as there is no previous count down bar before it.
d)The close also has to be greater than previous bar's close.
Entry, Exits,Stoploss,Profit taking in case of combo same as sequential.
There is more liberal version of combo which I follow which requires all the conditions of combo countdown bars as mentioned above to be followed for first 10 combo count down bars but for 11,12 and 13 bars all other conditions are waived...only condition is the close of these bars be lower than previous combo count down bar for buy count down and the close of these bars be higher than previous combo count down bar for sell count down.
We will see a Nifty futures daily chart to see TD Combo in action in the next post..
Smart_trade
Sequential does a great job in identifying the tops/bottoms of the market but in some cases particularly in rapidly falling/rising markets another method called Combo does a great job in identifying tops/ bottoms. It is recommended that both Sequential and Combo may be monitored simultaneously. It is my experience that many times the Combo identifies a top/bottom but sequential count down 13 is not yet completed....then market goes in opposite direction for sometime and comes back to test the top/bottom and in this secondary test move, sequential gives a 13 count down buy/sell signal.
Sequential and Combo do not speak too often but when they speak, it is in our interest that we pay attention .
The combo differs from sequential in the following :
1) Set up in sequential and combo are same.....the only difference is sequential requires Intersection on 8th,9th or any subsequent bar whereas in combo there is no need for Intersection.
2) The count down in sequential can start earliest from 9th bar. In combo it starts from 1st bar provided the set up of minimum 9 bars is completed. The question is if we need 9 bars set up to be completed then how can combo countdown start from first bar of set up ?? The answer is simple....start counting count down from 1st set up bar after 9 bar set up is complete.
3) The Count down conditions of combo are different....they are as under
For COMBO BUY Count Down
a)For Buy combo count down, the close of the countdown bar is equal to or lesser than low of the bar 2 bars earlier.
b) Each Buy combo count down bar's low is lower than the low of previous bar.
c) Each successive Buy Combo count down day close is lesser than the previous count down bar's close . This condition obviously does not apply to Combo count down bar 1 as there is no previous count down bar before it.
d)The close also needs to be less than the previous bar's close.
For COMBO SELL Count Down
a)For Sell combo count down, the close of the countdown bar is equal to or greater than high of the bar 2 bars earlier.
b) Each Sell combo count down bar's high is higher than the high of previous bar.
c) Each successive Sell Combo count down bar's close is higher than the previous count down bars close. This condition obviously does not apply to Combo count down bar 1 as there is no previous count down bar before it.
d)The close also has to be greater than previous bar's close.
Entry, Exits,Stoploss,Profit taking in case of combo same as sequential.
There is more liberal version of combo which I follow which requires all the conditions of combo countdown bars as mentioned above to be followed for first 10 combo count down bars but for 11,12 and 13 bars all other conditions are waived...only condition is the close of these bars be lower than previous combo count down bar for buy count down and the close of these bars be higher than previous combo count down bar for sell count down.
We will see a Nifty futures daily chart to see TD Combo in action in the next post..
Smart_trade
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