- Apr 2017
Market Cipher A
Trading Symbols and Indicators Guide
Market Cipher A is intended for Trend Analysis, and can be used with Regular Candles or Heiken Ashi Candles.
- EMA Ribbons
- Symbolic Guidance
- Identify your Trading Environment
Yellow and Red Diamonds
Yellow and Red Diamonds are trend strength indicators. Yellow indicates bullish continuation while the red indicates a trend may be weakening. These indicators should be used together with the EMA ribbons giving a further indication to trend direction. Consideration should be given to the color and band separation of the ribbons.
The Red X is a Bearish indicator. This indicator is used together with the EMA Ribbons and the Red Diamond indicator. The most effective usage of the Red X is when it follows the printing of a Red Diamond and the EMA Ribbons are nearly fully constricted changing to the bearish gray color. The accuracy of this indicator varies with time period.
The Yellow X is a bearish indicator and is intended to indicate high volume long covering that is rapidly bought up and sold short. This market condition also presents a possible opportunity for whale traders to exaggerate the condition by manipulating the rate of buyback indicating a possible bottom or reversal to breakout traders. This in turn supplies local liquidity then the whales reverse position forcing the market lower. The Yellow X is most reliable on 1 hour and above time periods.
The Blood Diamond is a Bearish indicator. This indicator is used together with the EMA Ribbons and the Yellow and Red Diamond indications. The most effective usage of the Blood Diamond is when it follows the printing of a Yellow Diamond and the current candle is printing a Red X and Blood Diamond stacked. Additional confirmation can be obtained from the EMA ribbons if they are constricting trending down. The accuracy of this indicator is greater on the 1 hour and above time period.
The Green Dot on Market Cipher A is a bullish indicator and is most reliable on a 6-hour time period and higher. This indicator normally follows a Blue Triangle and should be interpreted over a range of 1 - 3 candles. Normally a breakout is probable when the next 1 - 3 candles print a Yellow Diamond. If the next 1 - 3 candles print a Red Diamond the breakout is less likely.
The Blue Triangle is a trend reversal indicator that indicates a possible reversal of the previous trend. This indicator is intended as an early warning that the trend momentum is decreasing, and a reversal is near. The Blue Triangle should be used together with the other indicators of Market Cipher A to provide further confirmation.
The EMA Ribbon indicator is a group of exponential moving averages of different lengths. They are used to determine the strength of a trend by looking at the distance between the moving averages. They can be used to identify key areas of support or resistance by looking at the price in relation to the ribbon. The ribbons can also be used to signal potential trend changes when the price moves through the ribbons or the ribbons cross each other. When the ribbons are blue and white the trend is bullish. When gray the trend is bearish.