Today I am going to plug my custom indicator. I thought I would because I was talking to someone this morning and he stated that he had a good night from one of the signals the Signal2 made and the GaP confirmed as a break out.

Take a look at the following charts: They both illustrate the type of trade I am looking for. The GaP turns blue and is above the trigger line, with ADX above DMI- and an oversold Stochastic. Basically the Gap was developed to look at price action and determine if the pair is starting a new short term trend. By short term I mean a 150-300 point move after consolidation. 

This next chart shows the consolidative function of the GaP. As price moved sideways or against the current short term trend, the GaP forms consolidative descending hills. When the GaP line turns blue and breaks the pattern of the descending hills you can look for positions in the direction of the DMI. Even the big move in the middle marked with the yellow windows was a good trade. Since the market broke out of consolidation and the dollar took off, I have sidelined myself for the last few weeks not wanting to get caught in the wrong side of wild move. These signals over the last few days lead me to believe we are getting back to a reasonable market.

Compare July to August when the market started the precipitous drop below ranges around August 7^th.  The top section, July has distinct consolidating moves and corresponding short term break outs.  In August the initial fall didn’t consolidate before hand and only three patterns formed. Many of the indicators for moves were so oversold in a few of the pair that I am sure more than one person was induced to take retracement positions. On the other hand I sat aside and will wait for better conditions. The charts are starting to come around again, and I think the GaP will be back at work within a week.

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