Trading with AMA and price action- forward testing

[vijkris]

Bhai, where were you all these days.

Earlier I used to make time for TJ, now I am coming only during free time, so thats usually on sat/sun nights.

Vijay Bhai, how are u

Hi, I am fine, thanks.
Btw ur pink avatar is bit feminine..

 

[vijkris]

Part 1 of previous week's summary of obv thread

Kumudhan ji and others, i can understand your dilemma. You are all always confused, what to use when. When to use 36EMA/200EMA/LV bar... etc. Let me try to simplify it for you. There is a popular saying Horses for courses. One thing that you need to be focussed on is that we are primarily trading of price and volumes (OBV). Now let us talk about the LV bar concept why it gets formed was made very clear earlier on. Now the concept of BO/BD from LV bar amounts to wresting control from the other camp (Bulls and Bears) by either of them. There are 2 types of BO/BD one is price and the other is OBV they both may be linked but they are different. If we see addition of OBV from LV bar then it shows BO. Now OBV (as i have many times said) is truer. Meaning that once it BO/BD it stays that way for some time (Most often the rest of the day after the final LV bar gets formed) but many times we see the Price LV bar tested and sometimes breached after BO. (Price is fickle) at that time you have to take cue from the OBV LV bar line to enter longs again when strength in price resumes. The LV bar/PDC/36EMA/200EMA/Channels/Hourly bands...etc are just parameters to gauge the strength/weakness of price/OBV. That is what we are doing in all our methods, to analyse this strength/weakness and take trades.

Let me first explain the trades verbally and then i would post some charts and why i was led astray in my thinking in between.

Ok here goes. If you observe any chart with cloud carefully, you will find the best opportunities come to you when price pierces the cloud (when the prior move/trend has played out.) I had once told Vijkris ji (and that implies to everybody) to work on your entries. No doubt that the actual confirmation comes from the breach of 200EMA but many times it is too far away and the major move has already happened by the time it crosses 200EMA. When we take a trade on breach of cloud border (36EMA) not only do we have a very small sl but we also get to play the whole move of the trend.(From cloud entry from one side to cloud entry from the other side). Now when to take a trade based on this method. You may avoid the 1st breach but if the 2nd breach takes out the lows/highs (as the case maybe) you are somewhat confident of taking that trade. Your SL in this case would be the highs (in case of shorts) between these 2 breaches. In case of longs you just have to figure out the same logic oppositely. The SL would be the lows between the 2 breaches. Mind you this is not a sure shot profitable trade always, but the odds are good. Moreover you can take the help of OBV to ascertain the current trend as a further confirmation. (This method is risky as you are going against the shortest term trend but the risk rewards are tremendous). Why i scerewed up in covering my shorts early at 3116 though the OBV was suggesting lower levels was because i thought that the volumes being traded in Sep. Contract were too thin to be considered but obviously i was wrong.

The reasoning in the above explanation is also very sound. You all know that i treat 36EMA and 200EMA as dynamic supports/resistances. So the 1st breach of this support (if the prices are going up and 36EMA (cloud border) is above 200EMA can only be confirmed as a breach when after breaching the same, the retrace is not able to breach previous highs. (Dow theory earlier there was higher low/ higher high configuration, the 1st breach just puts in a lower low now to confirm the change to downtrend we need a lower high which happens and we are in business.

View attachment 21992

View attachment 21993

So trade each day as it comes. There would be plenty of time for positionals later. If you do not want to use the VKSL, then you can use the PDC,11:00 AM, 1:00PM and 2:30 PM lines in OBV for ascertaining the strength/weakness in the market as the levels of these lines (at least time wise) would be the same for all users. How to use them. Just use the pivot highs and lows just before the formation of these lines to use as BO/BD. Simple.

I was not expecting this taarget also..but I have seen OBV is completely refused to going down from last 1 -1:30 hour...& see the lower prices it is making..old learning of price action learnt from ST Sir comes as another confirmation by Price action..Price & obv both decides my action but now I give utmost priority to OBV..OBV was saying, I am not going down..then what is happening? Price is also not going down much..wait for some Bullish price action..which comes as HAMMER with volume..I dont take bullish divergence much when we are in down trend..but here OBV gives me confidence to take it..all thanks to Varun Sir, I am now more confident about my trade & its direction..
Thanks a lot

Another thing i wanted to caution all of you is that whenever you take adds and your position swells always keep 2 SL's feeded in the system 50 or 100 points apart (in Silver) or about 15/20 points apart in crude as sometimes it just does not trigger and with the kind of moves today one is trapped badly if the SL jumps. And also you have to monitor your trades having adds very carefully. Stops should be tightened with each add.

Modified Divergence code :OBV leading doesn't tell leading what?Now colored red/green arrow shows OBV leading downmove/Upmove. View attachment 22021


showvdiv=ParamToggle("Show OBV Leading", "No|Yes",defaultval=1 );
showpdiv=ParamToggle("Show OBV Lagging", "No|Yes",defaultval=1 );

barsused=Param("Period",5,3,200,1);
vdiv=(OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)) OR (OBV()<Ref(LLV(OBV(),barsused),-1) AND c>Ref(LLV(c,barsused),-1)) ;
pdiv=(OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)) OR (OBV()>Ref(LLV(OBV(),barsused),-1) AND c<Ref(LLV(c,barsused),-1)) ;
if(showvdiv)
{PlotShapes(shapesmallUpTriangle*vdiv,IIf((OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,l,-12,0);}
if(showpdiv)
{PlotShapes(shapesmalldowntriangle*pdiv,IIf((OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,h,-12,0);}

View attachment 22022

Final version of diverence afl.Now OBV in separate panel is not needed
This is my contribution to this great thread.Hope you guys like it.

_SECTION_BEGIN("Divergence with LVC");
SetChartOptions(0,chartShowArrows|chartShowDates);
_N(Title = StrFormat("{{NAME}} - {{INTERVAL}} {{DATE}} Open %g, Hi %g, Lo %g, Close %g (%.1f%%) {{VALUES}}", O, H, L, C, SelectedValue( ROC( C, 1 ) ) ));
Plot( C, "Close", ParamColor("Color", colorDefault ), styleNoTitle | ParamStyle("Style") | GetPriceStyle() );


ulv=Ref(V,-2)>Ref(V,-1) AND Ref(V,-1)<Ref(V,0) AND Ref(C,-1)>Ref(O,-1) AND Ref(C,0)>Ref(O,-1);
dlv=Ref(V,-2)>Ref(V,-1) AND Ref(V,-1)<Ref(V,0) AND Ref(C,-1)<Ref(O,-1) AND Ref(C,0)<Ref(O,-1);
fulv=ExRem(ulv,dlv);
fdlv=ExRem(dlv,ulv);
ulvl=ValueWhen(ulv,Ref(L,-1));
dlvl=ValueWhen(dlv,Ref(H,-1));
fulvl=ValueWhen(fulv,Ref(L,-1));
fdlvl=ValueWhen(fdlv,Ref(H,-1));
PlotShapes(shapeSmallCircle*ulv,colorGreen,0,Ref(L,-1),0,-1);
PlotShapes(shapeSmallCircle*dlv,colorRed,0,Ref(H,-1),0,-1);
PlotShapes(shapehollowCircle*fulv,colorGreen,0,Ref(L,-1),0,-1);
PlotShapes(shapehollowCircle*fdlv,colorRed,0,Ref(H,-1),0,-1);

showvdiv=ParamToggle("Show OBV Leading", "No|Yes",defaultval=1 );
showpdiv=ParamToggle("Show OBV Lagging", "No|Yes",defaultval=1 );

barsused=Param("Period",5,3,200,1);
vdiv=(OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)) OR (OBV()<Ref(LLV(OBV(),barsused),-1) AND c>Ref(LLV(c,barsused),-1)) ;
pdiv=(OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)) OR (OBV()>Ref(LLV(OBV(),barsused),-1) AND c<Ref(LLV(c,barsused),-1)) ;
if(showvdiv)
{PlotShapes(shapesmallUpTriangle*vdiv,IIf((OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,l,-12,0);}
if(showpdiv)
{PlotShapes(shapesmalldowntriangle*pdiv,IIf((OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,h,-12,0);}
_SECTION_END();

 

[Kumar .]

How to use AMA?

 

[vijkris]

How to use AMA?

I have no idea, sorry.
I tried to learn, couldn understand exactly how to use it.

 

[vijkris]

Part 2: Interesting developments.. OBV candle

If you really want to see the strength and weakness intraday then just draw 2 lines at the last high and low pivots of OBV (Not the day's high and low). You will find that on trending days once OBV BO/BD from this range it does not revisit the other line. It can be construed as something like the ORB (but to be termed as CRB). It is a very powerfull indicator. Just check a few charts and you would come to know its relevance.

Cool ji read my post again. I have clearly written the last high and low pivot. How many last will it have.

It really helps when you plot HTF Ema's in LTF charts. In 1min. charts the exact recent low of 24122 coincided with the 200EMA of 5min. charts thus giving a support to give a quick 50 points. I feel these dynamic supports are much better than fixed ones.

Varunji, do you means previous days' last pivot high and last pivot low of OBV as you are referring to ORB/CRB? Please pardon for so many naive questions.

Thanks again.

Same day last pivot low/high....simply put it...last pivot low/high....

No Chinna ji the previous day's last pivot highs and lows. Most often these are formed in the last 15min or 30min of trade. But sometimes they are so powerfull that sometimes the next days whole day's range also does not breach either ends (Signifying a sideways day with no apparent trend).

CRB would stand for closing range break.

Phew that was some upmove. OBV ribbon system with lvb picked this again.

View attachment 22030
Bnf 3min

Above chart shows the two ways one can use divergence to enter a trade.

View attachment 22035

Markets about to close so no entry.But this is how to enter countertrend using LVC.
SL is always at days high.

View attachment 22036

Refer level of price and OBV w.r.t to EMA36 and EMA200 cloud..

If you refer to the charts any one mine or shikamaru ji's the buy was given at 1:00 by OBV at around 24140.

Post a few charts for the CRB so that i can know that you have understood the concept. Today was a buy on dips as the lows of CRB were held once we broke above the range.

You can also see the kiss of goodbye in OBV charts which led to the massive move.

View attachment 22037

Manish ji how have you plotted OBV in candle form. It looks so good.

Yes VKji.I found it easier to read it through candles.
Here is the code.
_SECTION_BEGIN("OBVcandle");
Plotohlc( Ref(OBV(),-1),Ref(OBV(),-1),OBV(),OBV() ,_DEFAULT_NAME(), ParamColor("Color", colorCycle ), stylecandle );
_SECTION_END();

 

[vijkris]

Part 3: Ok now many subplots developing.. Divergence indicator by manishji, renko by dossji, Crb by varun ji.

My God Manish ji such clear charts. We can also trade the pivot method using these charts. I am so glad i started this thread. Got so much to learn from you guys. Hats off and thanks.

Funny thing is i made divergence indi to remove OBV panel from my charts.But now i have to put it back on my chart for CRB.Also i like this kiss of goodbye concept.A very Nice name given by you.I want to use it just for the sake of getting to say those words.lol.Guess OBV is going to stay on my charts for now.

God Bless you Manish. Guys give a big round of applause to Manish ji. He deserves it. A big Thank you Manish ji.

LVC indi plots volume pivots on a price chart.It is a simple 3 candle volume fractal with a filter.

Since Renko is the in thing, the candle charts of OBV can be construed as the renko system of OBV. Such clear charts. Very less or no noise.

Varun ji,

I have marked CRB in BN 1min chart. Previous day close of OBV has been considered as the last pivot high. Am I right in doing so?

View attachment 22038

OBV levels differ in kite though.

View attachment 22039


Low volume fractal - Peak volume,Trough volume,Peak volume

Not all troughs are plotted because of a filter.Open of the low volume candle is that filter.It shouldn't get engulfed by next candle close.

See the case of Crude we are within the CRB and sideways only, no trend for almost 7 Hours.

Manish ji can you break it down further and try to explain by marking on the chart how you get a signal and why. I am sorry i am a tubelight.

View attachment 22040
Ok another try.I hope this one is clearer to see/ understand.

If (n-1) candle is less than n and n-2 candle it qualifies as Low volume bar. (n = current candle),
For fractal, Are counting only 3 candles?, As per Bill willams it should be 5 bar from simple to complex fractal.
Just for clarification since 3 bar fractals fake many times...

Yes 5 is more common.I opted for 3 as i needed early confirmation.Also i use it as a supporting/confluence tool and not as a standalone indicator.3candle in 3min is like using 9bars in 1min.So its better than 5bars in 1min.I hope you getting what i mean to say.

VK Sir,
few doubts kindly clarify if possible..
a. is this a valid entry? even if obv went down after entry.
b. how to take 1st trade of the day?
check for lv bar created between 1 -2 pm then go long or short at the breach of pivot. then how to use obv with it?
c.finally in a counter trend entry how is the obv used ?
i have tried to answer these questions from last 5 trading days but unable to find the answer.. any heads up would help.. its like i can see it, feel it but cant put my finger on it..its really driving me nuts..
thanks again

Arjun ji i have always maintained and still do that the OBV gives the almost complete picture always. The market movers can screw up the prices to hit SL's but for creating volumes you need to do much more than talk. Meaning you need to put down money where your mouth is. I always have more faith on OBV than price but the only problem is that at times you cannot quantify it. So the best you can do is after you see addition in OBV (signifying strength) then look for strength in price to enter. Looking for weakness in price would only wrong foot you. See yesterday's charts and observe where the uptrend started in OBV. We need to have enough selling to breach those levels for us to go short positionally. The price inspite of the selling before the inventory or even after it could not even breach 3058 levels (which were the lows of the day). If i have my way i would only trade the OBV of any liquid asset with good volumes.

The upper red line in my pic is wrongly placed.It should have been placed one candle later.Closing Range is simply the last swing/candle color change in the OBV chart..
Now you should post some charts of CRB.It is the homework given by VKji.:O

its 1 minute chart last 30 minutes boundaries sir

Its 3 candles of 3 min chart.In 1min chart it will be different.As i said before use last swing if 1min chart or last color change if using 3 min or other higher timeframe.Or just use last close as Vkji suggested.



As you can see todays CRB is just last 13 min range.

View attachment 22050

Entry was as soon as UpLVC confirmed which means red bar close after divergence bar as resistance dnLVC was already taken out.There was an entry earlier on break of days second candle as well.But it was without divergence or OBV support.Stop was also wider and room for movement was also not there because of yesterdays last broken pivot.
While i was typing all this another entry is triggered.A trapped trader entry was also triggered later leading to a wide range bar.Hope those who are using Divergence indi are having a good time.I can see goodbye kiss traders having a lot of fun today as well!!

View attachment 22052

Above mentioned entries shown in the chart.

This is my final post regarding how to use Div indi,Hope you guys liked it.

Another trapped trader entry at 10:30..Divergence has turned LVC into a deadly weapon.
VKji, I can never thank you enough for this gift..

Please go though all my post.Please try to read the code and understand what is happening.Its not that diffcult.I am also a self learn coder myself.Still if its not clear post some charts with your doubt.Just saying i dont understand won't help.Right now i have no idea where your are getting stuck.

Is this a valid long setup or am I missing something yet again? Seniors please advice.

View attachment 22057

Thanks

Meenu

This methods are used by Forex traders as explained by Manish earlier, this concepts require high degree of concentration, interpretation and acting upon it in realtime takes long time. if you are at beginner get the basics right, that is 36/200, Price/OBV.

I guess Manish might have taken around years time to master the concept and trade profitably on that.

Very true Manish. I look forward to understand all this but it will take time as these concepts are totally new to me. Moreover, I am not using Amibroker so it will make it tougher. But I will surely go through all your posts and try to learn this concept.

Thanks again

Nope ,not yet.OBV works really well in lower timeframe.Price works better in higher timeframe IMHO.

I am sorry to say but you need some trading software to trade this method.There are too many things happening and its going to be very difficult to track everything manually.Better learn Ma method.Its just as good if not better IMHO.

The clouds in OBV and price were contrasting at that time, in OBV 36 was down 200 was up, reverse in price, so Price and OBV both out of sync.

Thanks Manish ji for the OBV candles. Peace of cake with it. Just look at 5min TF and plot a 36EMA on it and see the magic of levels. 1 st long and then an add. Now the SL for longs is at 24260.

Varunji,

Can you please share the chart whenever time permits you? As per the kite charts OBV in 5 mins was below yesterday's afternoon range. Your charts will help in getting a better understanding of the rationale behind the trade. Pardon me for bothering you so much.

Thanks
Meenu

 

[vijkris]

Partt 4: 10,000 characters reached in previous post, so it has to be split up.. Anyway it seems I am copying almost all the posts..

View attachment 22058

A sell signal generated just few seconds back in BankNifty Spot View attachment 22059

Sabhlok ji what you did was the typical mindset of all of us small traders. We know that most likely the OTM options would expire at zero but still we all chance our luck. The trick would be when we learn to sell options instead of buying. That would show that you have matured as a trader and have full confidence on your system.

Took one long and one short in copper.
Long when OBV BO of CRB zone and price above LVbar...
Exited and shorted after seeing divergence in price and OBV

Took one long in nickel as well...........
Thank you Varun ji and others who have contributed to this thread....sometimes words are not enough to express the gratitude.......but Thank you...

i have to learn one more thing from you sir, that while trading there i should completely surrender towards price and should not let emotions to interfere in between. thanks sirji.

AP ji you are right in your understanding of OBV logic but i as a day trader only concenterate at the present set up being thrown up. I also feel that we may make a final low near 23850 in the coming days where OBV divergence would give us a longer lasting long trend.

SO the OBV roadmap is to play the BO above yesterday's high of OBV or play BD below the lows of today's OBV. Monday morning cues should come from CRB. Today though we made a higher high in price but could not take out yesterday's highs of OBV leading to a very visible divergence.

This trade setup may look simple but it is very effective. We have a small sl and we are taking the trade when it pierces the cloud from below. (Just imagine the cloud).

I think you guys still have not understood when to use PDC/CRB/LVB/36 EMA/200EMA. Let me try to explain it one last time. Forget the names given to these PDC/CRB.... etc. Just look at them as supports and resistances.(Some dynamic and some static) deal with them just like you would deal with any S & R. You go long when a resistance is scaled and you go short once a support is broken. You trail this BO/BD by the levels of the next S or R than the one you have used for initiating a trade.

You only use the support or resistance level nearest to the price to base your decision here just using a static level and waiting for it to be breached would deprive you of a considerable amount of points from the point of reversal. For trading then you need to use dynamic S and R (36EMA/200EMA).

For example the time to use PDC and CRB is at the opening. Once we have had a say 100 point move and the values have moved far away from the CRB/PDC levels then what is their relevance at that point of time. Waiting for them to be reached again would deprive you off these 100 points. It makes no sense. At these times you start using dynamic S & R as they also move along with the prices/levels.

if you followed this explanation then it should not come as a surprise why we entered trade based on 5min. charts obv candles.

Trading is not like taking an exam where you can mug up and answer the questions. You need to understand what is the logic behind any system/indicator that you use.

Playing the OBV method does not mean fastest finger first. Since it is a leading indicator it gives you plenty of time to execute your trade. If you diligently play the OBV in only one instrument you will never need to work for a living. When the OBV gives you a signal it is akin to buying a barren peace of land only to see it getting developed and a mansion coming up on it thus unlocking the value.

 

[primitivetrader]

have you started trading or still learning. compiling of stuff is good but i dont think its gonna help you much as you need to zero down whether you trade a complete system or discretionary way. kichdi of both have not serve you well.

 

[vijkris]

Part 5

View attachment 22062

View attachment 22063

Doss ji donot underestimate the role of OBV. Today also you had given the level to short in BN which turned out to be the worst level because the prices did not go down at all from those levels. No i am not citicising you or your method but just trying to highlight the superiority of OBV over price as just after your message i had given the levels to go long looking at OBV BO and supports though price was not indicating any such move.

Vk Ji my method is to buy bottom and sell top. This method is very much successful on larger timeframe say 15Min. and may generate excessive signals at lower time frame. But at the end we end up with gains.

Doss ji give the AFL to people who also may use it and thank you. That way they can see the signal themselves and take trades and you would be saved the trouble of giving it in real time.

First Plot OBV then plot EMA and change source to BAL_VOL then select the EMA line and drag it to OBV plane.

View attachment 22064


Selecting EMA line...

View attachment 22065

Though I dont use Pi instead kite is better its lighter/fast /easy to handle and best part no installation

Just counting the points i could have made. 5 adds were available and the hard SL (200EMA has not been breached since the fall began) So 5*35 = 175 points per single lot position with adds. Apache ji mera ghar bhi Nerolac Chamka deta.

Was going through thread in traderji and then watched some basic video giving you the link of that thread.....Something new and very much based on volumes of bid and ask....I am still checking

Also it talk about a zone in a candle formation which is neutral zone where both buyer and sellers are at peace...Which can be seen as LV bar to me...

http://www.traderji.com/community/threads/order-flow-and-volume-profile-trading.101001/

Its the lowest volume bar formed where both buyer and seller are at peace .. Please read Varunji's thread you would like the concept and how he has use it

Quoting one of Varunji definition :

"LV bar is the lowest Volume bar. It indicates indecisiveness (or lack of participation by the market makers). This usually crops up as there seems to be a difference in value of the underlying between the bulls and bears. Who so ever defeats the other takes the price to their side in a nice trending moves. So in a nutshell if price and OBV is above the LV bar levels go long and if they are below, go short. That is all there is to it. For initiating a trade, one can go long above the last pivot high before this LV bar with a stop of the last pivot low before the LV bar. Vice versa for shorts."

Ok so coming back to the trailer i had promised to show. I had written about how one could have made 25Lakhs in DR Reddy shorts from 2750 to 1900. Now let me share some live examples of how to use OBV effectively to earn humungously. Let us talk about Dr.Reddy only but now in longs (It could be any instrument Reliance, Yes Bank, BajajF.....). Just posting a plain chart with price and OBV with 36 and 200EMA plotted on it.

View attachment 22066

Varun ji, How to avoid going short when OBV and price are below 200EMA...what i understand is we wait for TSL to wait....what is the TSL....is it the previous pivot low below 36EMA...or the pivot low below 36 EMA just before the previous add.... ?

Varun ji, If you are referring to 1m charts there is divergence.....since you don't have tick data...FYI...20t chart has no divergence....

Chinna ji you donot avoid such trades. You just have a sl. There are many times when once the price goes below 200EMA in OBV and price it keeps that way for a long time. In fact one should be thinking of adding to ones short positions then. The SL for all these trades would be the last pivot high above 36EMA (if the 200EMA is quite far off) or else keep it a little over 200EMA and keep on adding till our stop is not hit or our greed levels are not reached.

Thanks Chinna ji. Though i do not trade Divergence Per Se but its effect usually shows up on the charts when you trade the chart. Like today's divergence.

CM ji why complicate it further you already have a handfull of S & R. PDC,CRB(2),LVB,11:00,1:00,2:30 (in static or fixed) and 36 and 200 in dynamic. If one is not able to trade using these 9 S and R then even 50 would not serve the purpose and only add to confusion. For best results try to use one dynamic (say 36EMA) with the closest static S & R as a band.

This method is for positional trades where you keep on taking adds in the direction of the trend. If you are not unidirectional in positional trades then you will not earn big. The dholak play is good for intraday only. (Dholak meaning taking both longs and shorts as per signal intraday).

One might counter that we can get out at red signal and enter again at green. Sure suit yourself, but i know from my bitter experience that once you let go of your positions, some how or other you just do not get back into it.

View attachment 22069

So how to trade divergences effectively with more than 90% success ratio. Interested ?

Ok. Now when you spot a divergence between price and OBV then that means they both are not in sync. So either of the two would have to go in the opposite trend than the present trend it is in. Simply put if price is making a higher high and OBV is not then either price would have to come down or OBV would have to go up to rectify this anomally. Normally we wait for price to give us a confirmation by breaching the pivot high/ low between these 2 points of divergence. Often this pivot is too far off and the major move is missed waiting for the confirmation.

Now rather than waiting for the pivot to be breached as confirmation, just draw these boxes with both price and OBV and take trades in the direction of the BO or BD. Just posting a chart to make it clearer.

 

[vijkris]

Part 6:

View attachment 22071

Waiting for you to post the chart to clear a doubt.When you say BD/BO you mean BD/BO of MA36 Dynamic SR and not to wait for BO/BD of Static SR pivots formed by the MA36?

BO/BD from these boxes. I hope you saw the chart i had posted. Is it clear.

Manish ji i have explained in the chart itself as to how to draw this box. It seems you missed to read point 2.

These are all simple methods which if employed regularly makes it a normal habit and a S.O.P.

Ok sir... spot divergence and draw box from pivots of divergence to first retracement... BO or BD gives signal.... shall we add filter like price below EMA 36 only short and vice versa???

Sent from my SM-J200F using Tapatalk

Its clear now VKji.I needed to define it in my own words/or in terms of my view of price action.
For me It is Reversal in price but not in OBV.So we take another reversal entry in price.

Thanks.

View attachment 22073
LVC indi concept explained.Divergence indi concept is next.

View attachment 22074
View attachment 22075

I'll discuss setups next.

View attachment 22076 View attachment 22077

Setup 1 is what i like most.Setup 2 is really good for scalping.Setup 3 is useful if you need a strong entry trigger for your main trading system.Now use it as you wish.Add to it or subtract from it.Backtest it. Work out trade management rules.Do your homework.If you like it use it otherwise move onto something else.I made my contribution to this thread to show my gratitude towards VKji and other
great teachers at this forum.
Here is the code once again (this time with day high low indi included.)

////////////////////////////////Day's High Low indi//////////////////////////////////////////////
BarsInDay = BarsSince(Day() != Ref(Day(), -1)); Plot(BarsInDay==0, "", colorWhite, styleHistogram | styleOwnScale | styleLine | styleNoLabel,0,0,0,-5);

Hva=HHV(H,BarsInDay+1);
Lva=LLV(L,BarsInDay+1);

maxva=Max(HHV(O,BarsInDay+1),HHV(C,BarsInDay+1));
minva=Min(LLV(O,BarsInDay+1),LLV(C,BarsInDay+1));

Hb=BarsSince(H==Hva);Lb=BarsSince(L==Lva);

Color=IIf(Hb<Lb,colorGreen,IIf(Hb>Lb,colorRed,colordarkblue));

PlotShapes(shapehollowSmallCircle,Color,0,Hva,1);
PlotShapes(shapehollowSmallCircle,Color,0,Lva,1);
PlotShapes(shapehollowSmallCircle,Color,0,maxva,1);
PlotShapes(shapehollowSmallCircle,Color,0,minva,1);

GfxSetBkColor( colorWhite );
if(LastValue(Hb)<LastValue(Lb))//majormove is up
{GfxSetBkColor( colorGreen );GfxTextOut("DAYBias UP ",10,30); }
else
if(LastValue(Hb)>LastValue(Lb))//majormove is down
{GfxSetBkColor( colorRed );GfxTextOut("DAYBias DOWN ",10,30); }
else
{GfxSetBkColor( colorblue );GfxTextOut("Wait For FirstBarBreak",10,30); }
///////////////////////////////////////////////////////////////////////////////////////////////

///////////////////////////////////LVC indi////////////////////////////////////////////////////////////////

ulv=Ref(V,-2)>Ref(V,-1) AND Ref(V,-1)<Ref(V,0) AND Ref(C,-1)>Ref(O,-1) AND Ref(C,0)>Ref(O,-1);
dlv=Ref(V,-2)>Ref(V,-1) AND Ref(V,-1)<Ref(V,0) AND Ref(C,-1)<Ref(O,-1) AND Ref(C,0)<Ref(O,-1);
fulv=ExRem(ulv,dlv);
fdlv=ExRem(dlv,ulv);
ulvl=ValueWhen(ulv,Ref(L,-1));
dlvl=ValueWhen(dlv,Ref(H,-1));
fulvl=ValueWhen(fulv,Ref(L,-1));
fdlvl=ValueWhen(fdlv,Ref(H,-1));
PlotShapes(shapeSmallCircle*ulv,colorGreen,0,Ref(L,-1),0,-1);
PlotShapes(shapeSmallCircle*dlv,colorRed,0,Ref(H,-1),0,-1);
PlotShapes(shapehollowCircle*fulv,colorGreen,0,Ref(L,-1),0,-1);
PlotShapes(shapehollowCircle*fdlv,colorRed,0,Ref(H,-1),0,-1);
//////////////////////////////////////////////////////////////////////////////////////////////////////

///////////////////////////////////Divergence Indi///////////////////////////////////////////////////

showvdiv=ParamToggle("Show OBV Leading", "No|Yes",defaultval=1 );
showpdiv=ParamToggle("Show OBV Lagging", "No|Yes",defaultval=1 );

barsused=Param("Period",5,3,200,1);
vdiv=(OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)) OR (OBV()<Ref(LLV(OBV(),barsused),-1) AND c>Ref(LLV(c,barsused),-1)) ;
pdiv=(OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)) OR (OBV()>Ref(LLV(OBV(),barsused),-1) AND c<Ref(LLV(c,barsused),-1)) ;
if(showvdiv)
{PlotShapes(shapesmallUpTriangle*vdiv,IIf((OBV()>Ref(HHV(OBV(),barsused),-1) AND c<Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,l,-12,0);}
if(showpdiv)
{PlotShapes(shapesmalldowntriangle*pdiv,IIf((OBV()<Ref(HHV(OBV(),barsused),-1) AND c>Ref(HHV(c,barsused),-1)),colorgreen,colorRed),0,h,-12,0);}
/////////////////////////////////////////////////////////////////////////////////////////

View attachment 22080

Vkji,Yesterday you posted crudeoil OBV chart 1min.There you mentioned about no positional trading untill OBV level getting Negated.Could you please give more details about this 'Negation concept' or point me to a post where you have already dicussed it.

There is no negation concept as such. We just need to go below the OBV lows of 22nd Aug. We went below the price levels at that stage on 24th when we touched 3024 and that led to an excellent divergence trade of about 50 points since then.