Super Reversal Setup with ADX and RSI

First Trigger : Harmonic Pattern
ADX < 40 : OK
RSI < 70 : WAIT!!

Second Trigger : R38 Pivot Point
ADX Divergence : OK
RSI > 70 : TRADE!!

The logic behind the entry :

After Harmonic Pattern emerged, the RSI is not strong enough indicates market is not overbought yet. Although ADX is not over 40 meaning trend is not strong to go upward. There is not enough momentum to drive the market down yet. Other thing is the price already near R38 which can become a magnet. Trade at R38 spot is good enough as long as ADX is not rising above 40. The better setup is if ADX getting weaker. If ADX is rising we need to wait until RSI reach overbought area.

What happened next is ADX getting weaker while price going up. This indicate the bullish is getting weak. Then price hit the R38 and RSI hit the overbought zone. What happened is we get FOUR CONFIRMATIONS to SHORT!
1. Harmonic Pattern
2. Pivot Point
3. Overbought RSI
4. ADX Divergence

Conclusion:
Lagging indicator like ADX and RSI or MACD or Stochastic can be useful as confirmation to measure the market driving power. But to enter a trade, I need a leading indicator like Fibo and Pivot Point. There is an amazing great feeling to enter the market at best price or when market started to reverse. This is not a counter-trend trading. It is similar to wait price to pullback. Enter the market late is very painful, especially watching the market reverse and leave us in a bad entry.

Although with my current setup trade already profitable most of the time, I need a better filter to categorized trade signals. The trade above considered as strong setup with four good confirmations. Not every day we can find Weaker ADX with Over RSI at the same spot. But when it happened, you already know it will be a good trade.

Harmonic Pattern alone is not enough to enter a trade. The Pattern indicates that price is ready to change direction. But sometimes there is not enough momentum yet to turn the market around. Market is very efficient and to make price move with extreme curve is not healthy, Just like cars if we keep drifting and accelerate like a racer is wasting resources. We need to wait until the wind is getting weaker to set sail to the back. The ADX and RSI is the main tools to feel the weather.