What is BBT? It stands for Bull & Bear Thermometer.
When price closed above BBT, it is telling the trader, trend for this moment is up, focus on buy opportunities. If price closed below BBT, it is telling the trader, trend for this moment is bearish. Focus on selling opportunities.
How do we use BBT to our advantage? And how do we enhance our direction bias with the addition of Emolines.
Let's take a look at the video clip that I have captured this morning from Nikkei 225.
Before market opens, we can see that Emolines are opening up wide, bullish mode. When market opened at 7:30am, price traded for a short while and decided to go bullish mode as well, at this moment, trader’s focus is to look out for buy opportunities. You can also see that both Emolines & BBT trend direction are aligned.
Price didn't hold up there for too long. It started to decline at around 8:15am, Emolines flipped towards the bearish mode and price traded below BBT. Both indicators are aligned towards the same direction. So, focus on sell opportunities.
Profit taking for opening play? Traders can target for PAPLine-R1/S1 simply using BBT and Emolines.