{quote} Brilliant! I want to be using this example to launch an idea about trading this method on the lower time frames that might just replicate the reliability you get with this method on the higher time frames. Again based on just pure common sense! However its still very much in the laboratory for me, with the potential to be a spin off method on its own designed particularly for the lower time frames.g.
Lets get right back to the basic idea of a "swing failure":
Price swiftly hitting a major HHR or an LLS and testing the region beyond it without successfully sustaining the momentum and falling right back within the swing point.
The daily bar close is a condition that helps systematize the concept as well as filter the not so obvious setups but be very clear that while a daily closing back within the HHR/LLS is a strong sign of a fake out, its not what makes or breaks a fake out setup....or rather to avoid the confusion I should say the close doesn't make or break the fake out "scenario".
I say this because while for the most part the best fake out setups are the ones, where you have the daily closing in your favor, scan your charts and you'll find tonnes of examples where price closes strongly beyond the swing point and immediately and some times even eventually closes right back within the swing point.
The most defining characteristic of a fake out is quite simply the falsification of the basic structural principle of support turning into resistance and vice versa
Going by this, whenever you see price stepping on the gas beyond an HHR (resistance) and find it not being able to hold up via support at the HHR upon a pull back, you have a fake out. Beyond this every condition I use is honestly for systematization and filtration purposes.
*****************---------------------------*****************
Now that we have the back drop set, let's get down to what I was talking about the other day:
As I mentioned, I like the dailies because they contain more information and a bigger chunk of time encompassing all the trading sessions. With a 4H fake out or a 1H fake out, you are banking on partial or incomplete information which doesn't invalidate those time frames for trading but does extract some reliability juice from the method.
Attempts can still be made though, by taking a more conservative stance on the lower time frames than on the higher time frames, to still execute the method confidently. Being conservative obviously means waiting for the best swing points (possibly ones that stand out even on the higher time frames) but additionally in this scenario it means, waiting for multiple confirmations after the fake out actually occurs. Not only are you then dealing with more information, you also have seen through a larger "time bracket" to be more confident about your decision.
Here are a few examples:
PS: this is still an idea which is very much in a test tube, so kindly don't start running through several intra day live trades of "fake out scenarios". Do some serious back and forward testing and possibly post the results or questions or points of discussion here so it benefits you and all. Stay safe please.
g.
I believe . . .
