Break It Down

Break It Down is based on the Directional Movement Index and tells the trader when a market trend probably maxed out and ready to fall back. This pattern is more predictable when we apply this system only when the market is rallying but within a trading range. Because traders Sell off in fear the market often moves faster when declining! When this happens, good moves can occur.

As traders are no longer interested in the trend, the volume will decline and the price will usually fall back on itself. As sell offs usually happen faster than rallies, this system is suited for fast scalping entry/exit strategies.

We spot when trends are maxed out by using an Average Directional Movement Index and an average of Volume. We tell the market is in a trading range by using larger Bollinger Bands and Keltner Bands (recommended to have both 5 times bigger than regular 20 period averaging) and determining when the upper and lower Bollinger Lines fall within Keltner Lines to tell when the market is in a narrow range. When in this narrow range the Break It Down pattern is more likely to occur and so will then display a signal.

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