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Author Topic: The Pincher Play - An Explanation  (Read 12059 times)
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Vegas
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« on: January 18, 2012, 01:14:18 PM »

The pincher play is created when the MACD and the ADX come together and create a look similar to when you are pinching your thumb and forefinger together. Some people use the PPO as opposed to the MACD. Either one will work. The "pincher" play will generally occur after a sharp or prolonged drop in price. The pinch or run is triggered by the RSI(14). When the RSI(14) crosses the 30 to the upside, the pinch or the run will usually take place. This scenario of course is not a guarantee of a run but is used as an indicator of a run like many other chart indications we watch for.

The above is a simple explanation. A more advanced explanation can be seen here with this video presentation by Mr. Bigz's.

http://www.screencast.com/t/7FR3BYxeD

Here is an example of a chart where a pinch has taken place. Note the annotated changes indicated on the chart with blue lines. The RSI(14) crossed the 30 to the upside on the 10th of March to initiate the pincher run. At that time, the PPO and ADX start to separate and go opposite directions. As you can see by the volume and the candles, the buying kicks in and the price starts to rise. Also notice, the Positive Directional Indicator, the +DI has taken a sharp turn upward indicating the uptrend.



An Overview Of The Pinch With The Technicals Annotated In Blue

A Gain Of 24%



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