Let's recap what we have learned:
What the indicator is
Utilizing higher intervals for lower interval movements
How the indicator triggers
Why open triggers are important
How to utilize the Signals
In the next section, we will go over how to use the indicator on the lower intervals. This is honestly the most exciting and riskiest part of trading. We do trade on the higher intervals a lot, but the majority of our profits come from lower interval trading. That is why we saved this article for later. We have made a LOT of money using the technique below!
Lower interval trading, or intraday trading, takes a lot more skill (at least without our help). If you haven't been trading for long, just stick to 1 day and 1 week (interday) for now, but follow along so you can learn. It can be really difficult to beat interday trading, but you can slowly learn how to do it. Just through sheer practice and following along what we go over below is going to help you tremendously.
Small note: The majority of people that do interday trading utilize margin/leverage, which isn't recommended for beginners. But if you are an advanced trader that does use leverage, feel free to use it when utilizing the method below.
There are several reasons to use margin/leverage on the lower intervals. One reason is that the movements can be much smaller. We're not looking for 10% gains like we are on higher intervals, we're trying to make profits on movements as small as .1%. This is called scalping, and that's exactly what we'll discuss.
Please DO NOT attempt to use leverage if you have no previous experience with leverage.
Having said that, it is a skill that can be developed. You're spending time in front of the chart, and why not use testnet's available (such as Bitmex) to simply follow along and learn? A lot of money can be made trading intraday, and we can use the Aurox indicators to help make it easier.
Some of the things we'll discuss below can even be used on daily/weekly chart, so do not skip this article!
I'm going to try to keep this section short. One of the indicators we have developed is the Aurox Lines indicator. It basically draws trend, support, and resistance lines. If you already know how to draw these lines, you don't have to use this indicator. You can draw your own support and resistance lines. But if you don't, this indicator will be extremely important for the rest of this article.
Although trend lines can be important, we're actually going to turn them off. To do so, add the indicator to the chart, click the settings and simply uncheck the trend lines.
Even though these are labeled as lines, they are rather "areas". If we have support at $10,000, that doesn't mean that if the price goes to $9,999 the support has been broken. It can drop a bit below the support/resistance area and then rebound, this is normal. In addition, old supports can become future resistance areas and vice versa.
We can make a lot of profitable trades by combining S/R lines with the Aurox indicator to find bounces. These bounces cause price instability, and that's exactly our queue to take action. If the price is going up and down $1, we're not going to make much. We want unstable prices.
Keep in mind I'm only going to be discussing long entries. The same can apply to shorts but you just have to be extremely careful, as it becomes much riskier. Not only can you get liquidated quickly with 1 mistake, but it's much more stressful in general.
Let me give you an example of how this works, and we'll then discuss it. Pay attention to the blue highlighted areas. We'll be using the 4-minute chart and this is actually from today (Nov 11th).
If you look, there is a green dotted line which is denoted by the S/R line. What we're looking for are clear bounces on this line.
When the price approaches our S/R line, we notice that either during the bounce or shortly after the bounce we triggered a green long arrow. What this tells us is instead of the price breaking through this area and going down, it's going to bounce and go up. This bounce can be small, as shown in the first blue rectangle, or it can be fairly large, as shown in the second.
The goal is not to be greedy. Get in and get out. These triggers can happen 10-20+ a day, and any decent trader can make thousands a day even with small movements (especially, if you're using leverage). Start by taking profits quickly, and as you learn, you can start making riskier trades by keeping the contracts open for longer.
You also need to make sure you do not jump the gun. The price needs to either hit the area or even go below it. If you look at the red highlighted rectangle, the price almost touched the green dotted line. Taking that trade would have been a slight mistake. Just wait and be patient!
A few tips when attempting this method:
The most accurate trades are when the green arrow appears during the time when the price crosses or is idling under/on the line (for example the second blue rectangle one in the picture above).
When a price drops significantly (lot of large red wicks), and then bounces on a support right as the green arrow triggers, this can signify a strong price movement upwards. Buyers will try to come in and drive up the price, even if for a short period.
To see this in action, I've actually gone through and highlighted areas on this shared chart. If you visit this link on your computer, you'll see I've highlighted every bounce that has happened in the past 2 days.
I've marked each area using different colors:
Green = Great entry (9 events)
Yellow = Okay entry (4 events)
Red = Bad entry (2 events)
Based on the events above, this has an accuracy of 81% (if we assume we broke even on the yellow entries). But what is more telling is the fact that most of the great entries had HUGE movements. Almost every single green entry saw a $200-400 price gain from trigger to the next peak price. Even just trading 1 BTC and taking 1 of those green entries would have made us $200 in less than 2 hours!
Whether you're a beginner or advanced user, pull up the chart as we showed you, and follow along. Just watch the bounces. Don't even trade, just watch and learn. After you've gotten comfortable, try using testnet and attempt some trades. Finally, after you've gotten the hang of it, try live trading.
Leverage is NOT necessary for this, but if you know it, use it. It'll accelerate your profit margins. If you don't know it, learn it. There are hundreds of guides out there, and again, you can always use Bitmex testnet. But if you do not know it, don't just start using leverage live for the first time by following this guide. You will lose money!