Click on the chart to enlarge it.
This setup (points B & B'') triggered a short entry shortly afterward (shown by red down arrow on chart), and price began falling until it encountered the support of the lower standard deviation bands of the Ocean moving averages (shown by blue up arrow on chart).
Note also that the NST (one of the Bounded tools) had dropped below its oversold level (shown by blue up arrow in NST sub-graph), indicating that a bounce was possible. These events often tell us that a pause, or maybe even a minor bounce, is probable as the market works off its oversold condition.
Finally, note the Ocean developments occurring on the 15th, as noted by the NMC and NXC Zero Hits (C and C'' respectively). Remember that the Daily Zero Hit occurred on the 14th, so the 15th is really the first day that we can apply the daily timeframe Zero Hit information to enter on an intra-day timeframe.
However, there is nothing preventing us from using the 360 minute information along with this chart's signals to take a preliminary position on the 14th, assuming that the daily will ultimately trip a short signal itself and that all time frames would then be in agreement.
One of the beautiful aspects of trading Ocean is that since it's not a mechanized system, you can employ your own subtleties in trading and do so without others being aware of your actions. Otherwise, slippage can become a serious issue as traders dutifully follow pre-canned signals.
Again, the daily had set up on the 14th, meaning that the 15th is the earliest that it can generate an entry, which in fact it did. Therefore, we need to be especially vigilant on the 15th for possible intra-day setups where lower risk trades might be initiated.
As shown by NMC and NXC (C and C'' on the chart), a Zero Hit setup develops late on the 15th and triggers an entry early on the 16th (as shown by the magenta down arrow above prices).
Note that at the time of the setup and entry, prices had found significant resistance at the Regular Ocean MA (in thick magenta), and at the upper Fast Ocean MA standard deviation band (upper dashed green line). This type of setup adds additional confidence to the expected outcome of the trade.
This entry on the 240 minute chart occurred on the day after the entry from the daily chart, but it also provided a few additional benefits:
First, as can be seen on the daily chart, a small reaction rally occurred on the 16th, which would have put us in a losing position for a brief period on the 16th, just before the large down day on the 17th. Notice that this small bounce on the daily was the same event discussed here on the 240 minute chart that yielded the NMC and NXC Zero Hits early on the 16th.
Second, by patiently waiting for an intra-day chart to generate a setup, we were able to avoid the brief period where our position was underwater in the daily timeframe and enter the market short from a slightly higher price level - with just over half the dollar risk that would have been required to take the trade from the daily chart alone.
The exact methods used for entry and initial stop price (giving us a precise dollar risk calculation), as well as the techniques for add-ons (and something called "hidden add-ons") are completely explained to all Ocean Masters. We've been told that these methods alone are worth the investment in the Ocean tools!
Having thoroughly examined this time frame, let's roll down to an even lower one to see if we can learn anything else about this market and/or Ocean-based trading.
(This is the end of Part 4. Go to Part 5.)
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