Archimedes once said:

"Give me a lever strong, enough, and a prop strong enough, and I can singlehandedly move the world"






"Give me a maximum or a minimum of the year's quarter, and I will tell where the price will go :>"

Me.



In my first Article at this contest, I wrote about determination of a long term trend using larger timeframes, and signals, generated by the larger timeframes.

"Determination of a long term trend" Part 1

I'm sure it was interesting to some of you, but also, I can see the trader's rising interest to Intraday and Intraweek trading.

Intraday and intraweek trading - by saying this, I mean - when the trader is trading during the hours, days or weeks.

In this article I will explain How to Use the signals, provided by the Higher timeframes, to enter the trades on a lower time frames, and much more frequent with better quality.





***A picture Above, reminds you the entry signals, on a Quarter - period charts, that I have talked about in previous article

I would like to recall, that the main task is to find out the entry points on the market. I will show you how to enter the market using a daily charts, where I will demonstrate, that it is not necessary to wait for a quarter closure.


Picture 1:




picture 1 shows a key (short) entry point, and it's much higher than the low of the quarter.

Picture 2:


The sample, shown on picture 2, is describing, how to find entry signals, using a daily chart.I call this approach - "3 points".
The main rule of the approach, is to find 3 extremums (as in sample E1, E2, E3), then Use E2 and E3 (2nd Extremum and 3rd on a go), as points for placing entry stop orders.

You can find other extremums on the chart, but I have chosen the ones, I have pointed at, for being able to show you the "text book - perfect" examples.

There are 3 Rules to find an extremum:


1. Each extremum high (for a buy stop order) must be higher then previous candle high, and the next candle high.
2. Each candles in the pattern must be closed.
3. 3rd Extremum (E3) must be within the range of Extremum N1 (E1) and the Extremum N2 (E2), or 1/5 outside (not more), meaning inside or very close to the E1-E2 range.

3 Advices of my own:


1. Do not forget about trend direction, to use it with a trend, as it usually will give you more clear signals and will save you from false
breakouts sometimes (unfortunately it can not be guaranteed).
2. Bear in mind that Price direction and trend direction is not always the same.
3. Use a higher timeframe for a trend direction.

Any point E2 or E3, can be a breakout entry signal.


Picture 3:



Timing is paying a major role in determination of a future price move.

Something from a real life - TFTB

"The Faster - The Better"




The price level is like a Closed gate, And if the car (the price in our case) will stop before, or will not drive (move) fast enough then smashing into the gates (hitting the price level), the gates (the price Level) will not be broken, and a car (price) will not go through it.

As it is shown on a picture 3, the price, after the E3 is formed, to brake a E2 level must go through the same price distance, but in a shorter time period, or at least the same. So we're using a time, to determine the speed of price.

On the picture 3, you can see 2 Grey rectangles, that are showing, that the price took a 1/3 shorter time period, from the extremum on a higher time frame to reach the quarter low, then to form the extreme, after the quarter low has been formed, and, as we can see, the low has been broken.

Also on the same picture, you can see 2 green rectangles, that are showing the equal time period to form E2-E3 distance, and a price move, to reach the E2 level, as the consequence, the E2 Level has been broken.



Conclusion


So finally, I have made you familiar, to the methods, that are useful to trade with on time frames like Week, Day, Hour.


  • 3 Points
  • Time
  • determination of most important extremums.

P.S. In a purpose of not overloading you with the info, I have shown the sell signals, but in case of finding a buy signal, a trader must use the same principles.



Sincerely Yours

Arturs Jermolickis

(Marenno)
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