【Heaven and Earth Examination】A careful explanation of why the four points of MTF are correct as the basis
Hello! This is Shirou.
On the Daily and 4-hour MTFFour Pointsthat we have introduced so far.
Why are the four MTF points, in the first place, a valid basis?
Aren’t you wondering about that and losing confidence in your trades?
In short,
Because the points tend to move in that direction, they are easier to forecast
.
In this article,
we will explain one by one why the four points are correct
as a basis, clearly and simply.
1. Color change from Oscillator TF1①, second occurrence
The second color change from Oscillator TF1① is
frequently seen as a valid basis for MTF in Abusan’s Investment Guide
.
Let’s look at an actual chart.
USD/JPY Daily
I circled the color change from ①.
As the image makes clear,
the color change from ① tends to move in that direction
when established.
① is the TF1 that is
in an overbought or oversold state
.
From there,the color change at the second occurrence is confirmed as a reversal.
The second color change is
the area where the reversal from being overbought/oversold is confirmed and starts
there.
Therefore, it is a strong and correct basis for MTF.
2. Oscillator DX cross immediately after
Right after the Oscillator DX cross, the Heaven and Earth indicators originally serve
- entry trigger
- to avoid fakeouts
two roles.
Furthermore,
- you can determine when the oscillator is breaking away from a prolonged lock
an excellent indicator.
Let’s look at a chart.
Daily USD/JPY
Daily USD/JPY. I circled the long cross in blue and the short cross in orange.
Basically,
immediately after a cross, the price tends to move in that direction, and a cross from support/resistance strengthens the basis further
.
One tip
There were scenes where Oscillator color changes and Oscillator DX cross contradicted the trend. Is it still valid as a basis?
There were indeed scenes where Oscillator color changes and Oscillator DX cross contradicted the trend.
For example, in the DSATEA 1-hour trade, the 4-hour filterhelps to avoid unnecessary entries.
Similarly, users who rely only on Heaven and Earth indicators can still have a correct directional view, so for instance
- clear MTF on the daily chart
- execute on the two lower timeframes of 1-hour each according to the method
by doing so, you can trade in favorable areas while avoiding unnecessary entries.
3. Histogram DX2ver2, alignment of top and bottom
Next is Histogram DX2ver2.
The histogram shows
the direction of Oscillator DX’sLime and Magenta.
Lime reacts quickly, which is why it draws attention, but when Magenta aligns, the basis for trading in that direction becomes stronger.
Personally,
Oscillator LV2 = Lime
Oscillator LV1 = Magenta
something like that image
Histogram DX2ver2articulating alignment of top and bottomIf you were to
describe the state after a crossthat the trend continues
as a basis in MTF, it would be strong enough.
Let’s look at a chart.
Again, daily USD/JPY.
I circled the top/bottom alignment of Histogram DX2ver2 in blue (long) and yellow (short).
Most of the time, after alignment, the price moves in that direction.
In terms of accuracy, it is as strong a basis as the color changes or the Oscillator DX cross immediately after.
Moreover,
Histogram DX2ver2’strend continues until one side changes color,so alignment alone can be a strong basis
.
Personally, I thought it would be even more exploitable when the alignment starts.
The reason is
when the alignment starts, the trend tends to extend in that direction for a certain period
.
From this analysis, you can see how strong the alignment of Histogram 2ver2 is, and it makes sense why Abusan updated it.
4. ABUDMI, the first thick line
Finally, ABUDMI.
ABUDMI is an indicator that has been included since the release of Heaven and Earth’s Daisuing,
to determine the trend direction
.
ABUADX indicates strength, ABUDMI indicates direction, to make it easy to remember
When it crosses the 0 line, the first thick line has a high degree of edge.
Let’s look at a chart.
USD/JPY on the Daily chart.
I circled the first to third bars in blue (long) and orange (short).
As expected, the first thick line after the 0-line cross seems to have strong justification.
As you can tell from the image,
after crossing the 0 line, the first thick line tends to continue in that directionfor a considerable distance
that is,
- Color change from Oscillator TF1’s ①
- Alignment of Histogram DX2ver2 top and bottom
Thus, the trend tends to continue, making the basis strong.
Summary
To summarize, from validation and discussion
the four points in Abusan’s manual for MTF
all have strong bases
.
Histogram DX2ver2’s top-and-bottom alignment, which hadn’t been clear until recently, has become clear through deeper analysis.
I’m glad that DSATEA entries can be made on more currencies now!
Thank you for reading until the end!
Please feel free to leave a comment.