Trade GBP/JPY on the 4-hour trend direction with an hourly chart 【Chart Study】

Enter in the direction of the 4-hour trend


The figure below is the GBP/JPY 4-hour chart up to April 20, 2018.

GBP/JPY 4-hour

Lower row: Three RCI lines (red: RCI9, light blue: RCI26, yellow: RCI52)

On the most recent April 20, all three RCIs were declining, indicating a strong downtrend.

Now, let us look at the lower timeframe.


The figure below is the GBP/JPY 1-hour chart up to April 20, 2018.

GBP/JPY 1-hour

Upper row:BODSOR
Lower row: Three RCI lines (red: RCI9, light blue: RCI26, yellow: RCI52)


Sell-on-rebound signal (yellow arrows enclosed in a circle)

Among the three RCI lines, only RCI9 is clearly rising.
If RCI9 turns downward, all three RCIs may align to indicate a decline.
In other words, prices may fall strongly.

In this kind of situationBODSOR's sell-on-rebound signal (yellow arrows) lights up.

When the BODSOR signal lights upthe corresponding candle is an almost-shadowless (hammer-like) bearish candle.
Thereafter, prices fail to exceed the high of that candle and fall.
In this case, the sell-on-rebound signal tends to function well.
This demonstrates that, while the 4-hour chart shows a strong downtrend, the 1-hour chart’s sell-on-rebound signal


can work effectively.


Indicator displaying pullback buying and sell-on-rebound signals [BODSOR]


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http://bodsor.blog.fc2.com/

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USD/JPY 1-hour: Examples of pullback buying and sell-on-rebound signals



※In this article’s charts, for convenience of explanation, circles, lines, and squares may have been added.
Please understand.