I was thinking about the target. This is the hardest part of trading—determining exactly where the target should be. Most indicators are focused on entry points.
So far, both Enigmera and Meravith have been doing very well, but I feel like I have found what I was looking for and it's simply brilliant!
The target line and the exhaustion line are just lines by themselves, even though they indicate certain zones. The market gravitates around the support or around the target.
My logic is as follows:
I have assumed that the exhaustion line is what it is—and it is indeed extremely attractive. However, what is interesting are the boundaries of that exhaustion: how high and how low one can assume that the market will exhaust itself. After all, it's a zone. I used the most logical approach: I calculated a bullish and a bearish deviation for the target line and, in Meravit, for the exhaustion line.
The result is simply marvelous! This is a whole new world.
At the beginning of the trend, the price moves between the support line and the first deviation. At some point, it breaks through and a trend begins. When we have these two deviations, they create two channels—one below the target and one above it. Once the price enters these channels, it moves within them and no more respecting the trend deviations. The market respects just the exhaustion / target deviations.
Using this channel, I also obtain the true support, which, as we know, in many cases can be broken with a slight push, and the price may continue in the same direction. Now I can see where that little bit below or a little bit above the support is. There is a huge difference between this and the support channel.
This is one of my greatest discoveries regarding the mechanism of price movement.
📊 Visual examples below demonstrate this breakthrough concept
📈 Key Observation: The market stopped at bullish exhaustion deviation and reversed. Pay attention where the market found support. It broke the support line with some small pips, but in any case it was broken.
📉 Market Behavior: Market stopped at the bearish exhaustion deviation.
💰 Real Result: With above chart I drained the market yesterday.
👁️ Look what the market respects and how it is moving according to this line.
📊 $index before and after. Just see the levels market respects.
The ordinary trend deviation is no more respected. It is interesting just at the beginning of the trend. Compare the support line and bull target dev. Line
⚡ MARKET THEOREM
The target defines the support.
If trend reached the target and no more interest then the support will where the market get out of the target deviation channel.
Confused? 😉
📈 Next example. Market pay attention to trend deviation until entering the target channel then moves within it and disrespect the trend deviation
Same chart Meravith
