The olivera shake 'n bake
What is The Olivera Shake 'n Bake?
The Olivera Shake 'n Bake is when the market maker moves the market out of a channel it's been trading in. On a bearish trend, they will break out of the lower parallel and go into oversold territory, on a bullish trend they will break the upper parallel and move into overbought territory. Being able to spot moves like this will give you the opportunity to be in the market when there are 50-200 pip moves, and everyone else is questioning themselves why it happened. Though most would call it trend trading, it is much more than that.
The Olivera Shake 'n Bake is a strategy created by you mentor Chris Olivera through extensive back testing in the markets. A textbook will show you how to trade a trend or a channel; he will show you how to trade everything around and inside of it. With The Olivera Shake 'n Bake you will learn how to predict when the institutions are trying to Shake you out of taking the correct entry before they move the market the way you predicted, then they Bake their desert and watch their profits grow while you lose.
How do I use it?
In conjunction with the proper use of Candlesticks, S&R lines, trend lines, and divergence, The Olivera Shake 'n Bake can be utilized very effectively. The first thing you need to do it pick the correct time frame to spot the move, the higher time frames are stronger confirmations and moves. On a Daily of 4H time frame, you will want to first look for a visible channel the pair is trading in. Second, you will want to draw out the channel using either trend lines or even Andrew Pitchfork. If there is no visible channel the next thing to do is find any visible signs of higher lows (in a bullish trend) or lower highs (in a bearish trend) being formed and start to draw out your trend lines based off of those highs or lows. After your trend lines are drawn out, the next step is to draw out strong area's where price has bounced off of multiple time creating a support or resistance. You're going to want to find area's price has used as a support in a bearish trend and area's price has used as a resistance in a bullish trend. Keep in mind you may also look for support in a bullish trend and a resistance in a bearish trend.
After you have your S&R and trend lines drawn out, you will want to look for visible candlestick patterns near the highs or lows. The main focus though is to watch for channel breakouts. With channel breakouts what happens very frequently is that if price breaks to the top side on either a bullish or bearish trend, it has a chance of hitting a resistance outside of the channel being rejected and pushed back into the channel. So although you may have to take short positions in a bullish channel when it was at the upper parallel, it can still break out above it go to the next resistance, hit your stop loss on the way and reverse back down into the channel the correct way you predicted.