This continues our discussion of how we use trend in our trading methodology.

In the previous post I discussed how we evaluate trend: first on our primary intra-day trading chart and then on our secondary intra-day trading chart.

This post will discuss how we proceed after deciding what type of trade we are watching for on our secondary intra-day trading chart.

If I am watching for a trade in the direction of the primary intra-day trading chart trend:

And the secondary intra-day trading chart trend is in that direction; I look to the third intraday trading chart and try to construct my trade entry on the secondary chart at a point in its oscillation when price is moving in the direction of my trade on the third intra-day chart – preferably from a low point in the oscillation cycle for a long trade – or from a high point in the oscillation for a short trade. Such a trde has the advantage of all three intra-day chart trends moving in the same direction.

If I am watching for a trade in either direction:

The trade entry will be constructed on the secondary chart in the direction of trend on that chart. In addition, I will observe the third intraday chart and try to align my entry as close as possible to the point of maximum price oscillation – preferably from a low point in the oscillation cycle for a long trade – or from a high point in the oscillation for a short trade.

Finally, as important as trend is, it is only one factor in our decision to trade or not to trade. Our technical indicators and SRVs are there to guide our decisions and increase our probability of making a successful trade.

Trend is our primary means of determining what type of trade we are looking for – and where we will construct the trade – the remainder of our system tells us WHEN that trade is ready to act upon.

 

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