Brothers, yesterday's life-saving guide was sent out, and many people asked me: 'I understand the support and resistance, but how can I ambush in advance and catch that kind of doubling 'big demon coin'?'
In fact, the answer is hidden in the 'contraction' of the Bollinger Bands. If rising is the accelerator, then contraction is 'compressing a spring'; the tighter it is compressed, the more frightening it will bounce back.
1. What is a true 'contraction'?
You see SIREN (Figure 1) before the explosion, the upper and lower bands of the Bollinger Bands are almost coming together.
Logic: This means both bulls and bears are tired, no one dares to act, and the market enters a period of 'absolute silence'.
My mantra: Contraction is like a tunnel, the narrower it is, the more promising it is. If the hourly level track is as narrow as a thin straw, then the reversal is not far off.
2. How to measure 'explosion power'?
Here’s an advanced technique for everyone, look at two indicators:
Duration of contraction: The longer the contraction lasts, the more fully the main force has accumulated.
Width of contraction: You can see the SIREN 1-hour chart I posted earlier (Chart 1), the width before the outbreak compared to the 'big trumpet' afterwards has contracted to the extreme.
Experience talk: This kind of 'compressed spring' market, once it breaks out with volume, is often not just a 5% increase, but aims for a doubling.
3. Practical operation: How to 'scoop' before the outbreak?
Taking the SIREN I observed today as an example:
Ambush point: Don't guess blindly in the middle of the contraction, focus on the trading volume.
Detonation signal: When you see a big bullish candlestick that directly breaks through the yellow upper band, and the trading volume suddenly 'rises from the ground', this is called **'opening breakthrough'**. Entering the market at this time is like riding a rocket.
Defense position: After entering the market, treat the pink middle band as the stop-loss position. As long as it doesn't close below the pink line, hold on and let the profits fly for a while.
Finally, let’s summarize:
When trading contracts, the most taboo thing is to chase high when the 'big trumpet' is fully open (for example, SIREN right now is somewhat overbought).
Real hunters wait for the silence of the Bollinger Bands ‘contraction’. Remember: only by enduring the loneliness of contraction can you embrace the prosperity of the opening.
Tomorrow I plan to take everyone to practice this strategy in real life, to see how to place orders in batches when trading volume shrinks and prices retrace to the middle band. Brothers who want to see the real results, drop a 666 in the comments!