Bubble Deviation Strategy - a quick guide to the signals

Updated: Jul 14, 2020

First of all we need to determine whether a currency basket is a sentimental buy or sell. If the crowd are long, then it's a sell. If they are short, it's a buy.

Why we do the opposite of the crowd? Because most of them are counter-trend and consistently lose money (overleveraged, emotional etc)

Secondly, we use a horizontal axis to determine this divide in the majority / minority..

Now, if the crowd are long, and adding to long, it's a "Dynamic Sell" .

If the crowd are short, and adding to their short bets, it's a "Dynamic Buy"

So here's an example of GBPJPY as a "Dynamic Sell"

In this example we saw JPY move away from the vertical to become a Dynamic Buy and GBP also move away from the vertical to become a Dynamic Sell.

The herd were Short JPY and Long GBP, but they ADDED to their positioning / sentiment over time.

The clever part:

We are using Currency Baskets against each one another.

We are NOT looking specifically at the GBPJPY symbol (as 99.99% of traders are doing)

Rather, we look at the GBP basket strength vs JPY basket strength.

This gives us an incredibly powerful edge over all the competition.

We then allow the bubbles to continue to diverge, if they do, the signal is stronger, so we hold onto our winners.

If they converge (come closer together) the signal is invalidated.

Subscribers will see the signals like this in telegram:

The Stop Loss is Daily Resistance / Support 3. Wide enough to cut out the noise, but is only there as a safety measure, since we have the signal to exit (if appropriate) from the signals.

So, essentially the DR3 is a hard stop. The Bubbles converging (and therefore invalidating the signal) is a soft stop, and consequently we will get the signal to close (usually in profit) as follows:

Essentially, the Take Profit is determined by the bubbles, so we hold onto our winners for as long as the bubbles signify.

And then when we combine technical analysis for even more confluence, we have a winning trading system.

533 views0 comments