Click on the chart to enlarge it.
Here's an example of how Ocean performs on the Forex market, and also allows you to see the characteristics of a couple of the new Ocean Bounded tools.
Let's begin the analysis at the daily level, where we see that NMC2 produces a Zero Hit from above on Aug. 18th and 19th, generating a potential buy signal setup (denoted by the A in the second sub-graph).
Note also that NST, one of the new Ocean Bounded tools, has crossed below the oversold threshold (shown in the bottom sub-graph as A', where the NST has crossed below the lower red line oversold zone). This indicates that the market is now in a position to support a potential rally. The NMC2 setup then trips a long entry, as shown by the arrow on the price chart on Aug. 22nd.
The market rallies for a few days and then pulls back enough to generate another Zero Hit setup, this time from NMC (shown in the first sub-graph as B). Two days later, this setup triggers another long entry, as shown by the arrow on Aug. 31st.
A rapid three day advance then occurs, which leads to an overbought condition, where prices should be expected to pause or possibly reverse. This is shown by the arrow on prices, where the close exceeds the upped standard deviation band of the Ocean moving average on Sept. 2nd.
Additionally, NMC has exceeded its upper standard deviation band (shown by the letter C in the first sub-graph), and NST is also indicating an overbought condition by exceeding its overbought threshold (shown by the C' in the bottom sub-graph). When occurring in unison, these events signify that at least a short-term top has developed, and profits should be taken on the trade.
Lastly, let's examine the subsequent price action, which shows that after the top, prices decline below both Ocean moving averages. Also note that NMC as well as both of the Bounded tools (NDX and NST) cross below the zero line (show by the arrows in the respective sub-graphs), indicating a weakened market condition.
Now we'll await the possibility of a Zero Hit setup from below to offer us a selling opportunity. After a very subtle counter-trend retracement, the Zero Hit from below from NMC occurs on Sept. 14th (as shown by the letter D in the first sub-graph), and a valid entry is triggered on the 15th, as indicated by the arrow above prices.
It's now time to roll down to some intra-day time frames to see if it might be possible to dramatically reduce the risk required to assume the trade.
Note: It is sometimes asked whether it's necessary that multiple time frames are in Zero Hit agreement for a setup and entry to occur. The answer is no, it's not mandatory for multiple time frames to simultaneously develop for a signal to be taken. The setups and entries on this daily chart show that a single time frame can be sufficient for a profitable trade to be identified and acted upon.
The same single timeframe analysis, for isolated trades, can be used with the other intra-day charts supplied in this Forex example. However, the reason that we like to use multiple timeframe agreement is that it helps to identify the most promising trade setups and often allows us to radically reduce the risk required to assume the trade.
Successful trading really boils down to patience and discipline, something that identifying the most promising setups forces us to develop. By patiently waiting for the best setup conditions to develop, we're naturally allowing ourselves to operate from a disciplined mindset and thus strengthening the habits that are crucial to consistent performance.
(This is the end of Part 1. Go to Part 2.)
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