In the next few weeks, I will briefly discuss the multiple ways to successfully use FBCR in your FOREX trading, I encourage all subscribers to download our free eBook as a starting point for using FBCR. A Kindle version (for $1,00) is available on the Amazon Kindle Store website.
Here, listed, the primary ways to use FBC for trading:
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The 20/90 RULE or “Hadady’s Method.” This is, of course, the primary application of the bullish consensus numbers. Under 20 is a potentially Bullish signal while Over 90 is a potentially Bearish signal. This method works great as a filter for just about any other trading approach you may use. My students and I use it as a ‘overlay’ when considering Goodman Wave setups. As every experienced trader knows, just by hitting one more winner or missing one loser can dramatically change your bottom-line trading results.
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Next, I would rate DIVERGENCE. This means a divergence between Price and Bullish Consensus. Typically of course they move together: BC goes up as Prices rise; BC goes down as prices decline. A Divergence from that norm tells us to ‘Look Here!’ This is especially true when one or the other makes new highs/lows, and the other does not follow along.
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EXPANSION/CONTRACTION is a subset of Divergence and requires calculations to evaluate properly. Prices or Bullish Consensus trend at a substantially greater or lesser rate than Bullish Consensus or Prices.
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The SURGE. BC jumps or falls sharply over two-to-three weeks without a corresponding magnitude change in prices. If the PROS are causing a Surge it also says ‘Look Here!’
Here is a Divergence Note that Prices make new lows but he BC rises – divergence Type ‘C’ for us:
Here is a Surge It is as if the PROS are accumulating a position and limiting supply.
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