Disliked{quote} and THE MOST important question: how do you know which direction to trade?Ignored
But I try, bit long hope to simplify it further if I got time to find a better phrase to it.
So I'll give a quick example of how this works.
Suppose every timeframe from 1 Minute to 1 Month is going up at the same time.
That could be some sort of random event with no significance at all, or it could be caused by an underlying trend.
If it's just a random event, you have about the same probability of winning a reasonable trade as losing it, ignoring the negative expectancy imposed upon your trading by the spread cost.
If however there is some sort of underlying trend at work, it would stand to reason that an appropriate long trade should have a better probability of winning than losing.
That slight trend bias is what my trading seeks to exploit.
All nine timeframes don't have to be moving in the same direction at the same time to enter, but usually most will be.
So, for another example, suppose all the short timeframes are going up, say 1M, 5M, 15M, 30M.
Suppose the H1 is going down.
Suppose all the higher timeframes are going up, the H4, Daily, Weekly and Monthly.
In that situation I'd say the shorter timeframes must have been going down at some previous time to drive down the H1, but they have now already turned back up to rejoin the direction of the longer timeframes.
More often than not, I'd expect the H1 to turn up soon as well.
Of course, I'll not enter against the direction of the market, but if H1 turns up I'd feel comfortable placing a trade.
That's generally what I mean by Price Action Directional analysis. Sorry for bad English.
Point to note here :
I look at the market where price has move dramatically in one direction or the other and how price reacts to these areas when it comes back to them " ... I would offer Simplicity is the core of this statement, having 2 key elements "dramatically in one direction" and "price reacts to these areas when it comes back.
The only real requirement is that all the longer term trends are in your favor, since setting up longer term trades is the actual goal. There is no need spending endless hours trying to perfect the Holy Grail of entry methods.
If only a few more than half of our trades go in our favor right after entry, we can depend on the trend to move some of those to great profit
Best Wishes to your trades
PAT
I come from the future.
5