The Idea is the convergence of specific lines
The vertical lines numbered 1-10 represent potential turning point areas ( Analysis for another day ). I will be watching the interaction of 3 types of lines to converge to give me an Orange light to take a trade in either direction. The three lines I am referring to are:
1. An Andrews ML ( ) or an Upper or Lower Parallel (MLH)
2. Vertical Timing Lines numbered 1-10 on the bottom
3. Horizontal SQR9 Target Lines
Once I get a potential entry BAR that has met the above 3 criteria I will form read the bar and analyse the following
1. The Close in relation to 1 & 3 above ( Above the lines for a long position & Below the lines for a short position )
2. The size of the bar in relation to nearest TP areas. Must be a Minimum Risk/Reward of 1:2 (approx.) or better
3. Once 1 & 2 are satisfied GREEN LIGHT I will take the trade on the bar following the signal bar.
PS: Because of the steepness of original range i.e. 0.02175 the second is a which better represents potential market structure.
PSS: The idea is not to trade every vertical timing line numbered 1-10, the important point to take away is that I only focus on the interactions/confluence at the vertical ( Timing ) points in relation my trading rules above
I have reviewed my chart & trades and I want to bring to your attention an interesting play if you had applied my Stage 1 and Stage 2 trade criteria you would have found the following
1. Timing Line 9 ( + or - One Hour ) is acceptable. (Criteria Met)
2. Upper MLH Hit. (Criteria Met)
3. Horizontal resistance at SQ9 - 45 Degrees . (Criteria Met)
1. Close in relation to 1 &/or 3 ( was below upper MLH ). (Criteria Met)
2. Size of bar in relation to TP area ( logical TP was the nearest ML which you can see with the blue dots on the chart ). (Criteria Met)
If you had taken this trade your entry would have been 1 pip below the low of the high bar that touched the upper MLH near timing line 9. your exit would have been on that same hour at some point after touching the ML
As you can see I use a combination of specific timing lines as they play out within the median line set. My added confirmation is a pre-determined horizontal support/resistance line. Once my 3 ducks line up it's game on!!!
PS: As a point of interest take a look at the position of the market at timing line 10 and as an exercise see how many closes where above the blue dotted ML also see that it failed to reach the lower MLH parallel. In light of the above insight would you say there was underlying strength at that time? Absolutely:)
PPS: Just remember when trading "Timing Is Key"