Apex price action strategy

This is my approach to price action trading. So far, its worked pretty well on every trade I've executed with it. I'm thinking of making it my primary strategy. The strategy is extremely simple. Use lower highs and higher lows to make a triangle or wedge. The triangle should make a apex, or point where the two trend lines meet. Simply watch for the lows to continue to get higher and the highs to continue to get lower. If the pattern breaks before it nears the apex, ignore it. If it stays inside the triangle, pay attention.

Definitions,

Breakout, point where price moves significantly above/below trendline,confirmed by a spike in volume.

False run, a false breakout, normally not confirmed by volume.

test, when volume passes trendline without significant move in volume, retraces back, then spikes in direction before retrace followed by volume spike.


Strategy.

When a wedge or triangle is identified, it's important to confirm any move with volume. The volume gets lower and lower the closer the price gets to the apex. Once it breaks out, there will be a instant jump in volume. If there is no volume spike, it's probably a false run or test.

You can determine exact entry exit points based off the length of the triangle. Take the highest high or lowest low, and draw a vertical line. This line will end at the top trendline. Take the trend line and put the bottom of it at the apex, the top represents a take profit point. Repeat, but put the top of the vertical line at the bottom of the apex, this defines a take profit point for a short. To date, this system when implemented according to the rules hasn't failed. The trick is to be patient. Use volume as a indicator to determine when a spike has happened. DO NOT purchase anything until volume confirms.


Tips, symmetrical triangles can go either way. Upward triangles always go up, and upward wedges always go down. Downward triangles go down, and downward wedges go up. It can be hard to tell the difference sometimes. To avoid losing money guessing if its a triangle or wedge, wait for breakout and volume spike.

Can You post a picture of possible setup? Thx

Agree, definitely need some example of past setups and with the claim of success, should not be a problem to show those.

Also, how do you measure "volume"? Which broker do you use? What time frame is best?

The triangles sounds to me to be drawn off Fractal levels, there is an indicator made for that = DeMark

Also, it gives levels, perhaps as the description, maybe???

I absolutely can. I have some saved on my computer. The pictures will help clarify. Volume can easily be measured in most brokers. Mt4 has a volume indicator. Ill post a step by step on how to do it. You have to be careful which volume indicators you use. The wrong ones will take to long to respond. Raw unprocessed volume is best.

This is a breakout strategy. However, how reliable are volume indicators? I am really suspicious of the use of volume indicators in Forex trading; for stocks you may have some confidence.

Trade safe and prosper.

KP

It sounds interesting. You've got my attention. Let's see what you've got mate.

Hi, I would be interested too.

On their own, volume isn't great, and is only usable when the volume per candle is either ascending or descending. And even then, the ascension/descendance must be correlated to a general price trend. Rather it's flat, up, or down. Volume can verify other reversal indicators. When volume is increasing, the trend is gaining strength. When it weakens, it's about to reverse, a reversal from descending to ascending mixed with any trend break can verify a reversal of breakout. Volume is directly correlated to price changes, and can be used in unison with price and trendline to verify the prices direction.

I've heard someone talking about volume in correlation to candle size and shape as well as to other volume bars and candles. seemed to me like an interesting approach and somehow logic (if you have a big volume but an relatively short candle, you can say that there is a lot pressure going on). Is that what you mean?
Also you were mentioning that one has to use the 'right' volume indicator. Which one would that be?
Thanks.

Yes, a steady increase in volume without substantial price movement generally means it's about to change. Look at it this way, supply and demand dictates price. So, since supply is defined, we must use demand. Increase the amount of purchasers drastically over a short time frame, and the price will change. The price direction tells you which direction people are buying in, etc shorting or longing. The volume can be compared to historical volume to see how much room there is for change. If the volume is higher than the historical average, then the trend will continue until volume "demand" dissipates. If the price rises, and demand spikes, that means people are buying, and the demand will increase. If the price decreases and volume increases, then there is a reduction in demand. Since demand is elastic and supply is inelastic in currencies, demand is the driving characteristic. Price direction tells you if demand is rising or falling, but not by what degree demand is increasing or decreasing. Volume tells you how many people are following the current trend. Inversely, a long held trend with weakening volume means it's possible for a reversal, it does not however guarantee one. This is because with a increasing number of buyers and sellers, the ratio of buyers or sellers becomes more volatile. The higher the volume, the larger the market participation. The higher the market participation, the less room there is for the rest of the market to move the price. The lower the market participation, the larger the number of buyers and sellers who could potentially enter the market.

Heres a example of what I'm talking about. Notice how the volume was decreasing towards the apex, and the volume doubled when it broke through. Also notice how the trend lines became more apparent towards the apex opposed to farther. Towards the apex, the trend line resistance levels bounced up and down multiple times. Always pay close attention to the apex of a triangle.

Which one do you use the tp? show more examples to learn also thanks

have any one done this apex pattern indicator