SP500 Forecast Update And Follow Up

My idea here was to trade the short term buys

The price moved higher exactly as I expected and provided us wonderful returns!

This was an aggressive setup as we traded against the long term direction. On the H4 chart the first leg is a bearish trend pattern by itself, we also had two false breaks with bullish divergence based on the moving averages and histogram of the MACD indicator and also on the RSI indicator as well. Then the price moved higher and created higher highs thus forming a classical setup of bullish divergence followed by bullish convergence. Basically we were expecting short term retraces to happen here.

So the idea here was to spot the bullish trending pattern and then to look for the buys. We got the bullish trending pattern on the H1 chart. We were expecting a retrace towards the important buy zone shown in the screenshot below with a bullish hidden divergence to form and then to look for buys. We got the first retrace towards the buy zone with a bullish hidden divergence (it was a not a classical one) then the price moved higher and retraced again creating a classical bullish hidden divergence. We considered this as an evidence of bullish pressure and then started to look for buys which provided us wonderful returns!

Right now with the Corona virus impact the real money flow is not there in the market, a lot of investors and traders are out of the market and are waiting for this crisis to come down. Many traders are sitting on the fence making nothing, what you would see on the market in such period in panics, there are a lot of random fast moves with high volatility, very serious moves, big volumes but these moves are not technical but in such cases its very important to wait for your setups, have your analysis.

If the setup comes, trade it just like we did in this SP500 trade and we valued the risk with this trade, we had a proper money management plan. In such high volatility period if you would be right then once the price moves, it moves big and fast but if it doesn’t then you know your risk is limited. Don’t trade without planning your risk its a big mistake. In this case we were right and we got wonderful big and fast moves which has provided us fantastic profits. This trade is good example of how to trade in such high volatility conditions and how to trade aggressive setups..

Watch my video on How to trade during Corona virus Crisis here

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To your success,

Vladimir Ribakov
Certified Financial Technician