TRIGGER- Behaviour
Once price takes out a Key structure high or low(KSH/KSL), we have a TRIGGER. Next will be to observe the price behaviour at trigger point.
What is price doing at the KSH/KSL, Is it giving a
- True B/O, or
- False B/O, or
- A Failed B/O
I personally do not trade ranges as ranges.---- I look for triggers around them on lower time frames. As such, it still boils down to 1 of the 3 listed above.
True Break-out
This is when price closes above a KSH or below a KSL and does not go back.
In the chart above, price closed below the Previous Year Low (PYL) and has not closed back above the PYL. This is a true B/O
The distance between the PYL and PYH is the trading range (TR) for the year. So, we can say the TR has been extended.
When price gives a True B/O, what I’ll be looking for is a True Break-out Reversal (TBR) Set-up. Here I make use of the Demand and supply levels.
More explanation will come on this in subsequent posts on SET_UP.
False Break-out
Here, price closed below the KSL or above the KSH,( outside the TR), then comes back and close into the TR.
Example above is a bearish False Breakout.
In this scenario, I’ll be looking for a False Breakout Reversal (FBR) set-up, then later into the move, I’ll be looking for False Breakout Trend (FBT) set-up.
These will be explained in details later on.
Hello.
Where will be the SL and TP?
Another Brief Summary of the whole process
My approach to the market has been basically the same for over a decade now and it still works perfectly well…though with a little tweaking here and there to make it more effective…however, the basics remain the same.
Look at the big picture using the Higher Time frame…I call this Main time frame, and I employ the weekly or the daily or the 4hr never below the 4hr.
If I don’t see any a trigger on any of these 3 time frames, I move to another instrument.
After the trigger, I want to see how price behaves around the Key Structure Highs and Lows
Is it a True breakout, false or failed b/o?
This will determine the type of set up I’ll be looking for.
Next is the cycle…This tells me the phase the market is presently at.
If market will change its direction, it won’t just go straight down or straight up…
It may intend going into a bearish trend, but there’ll be times it will be bullish, and you don’t want to be caught in such retracement.
This back and forth is mostly in 3 legs (not the normal SB’s 3 pushes stuff)
I label them X-D
XA, AB, BC, CD…just for identification purposes.
This behavioural pattern happens over and over and over again in anything chart.
Next is the entry…This is as essential as all other aspects of my approach. Here I employ all sorts of tactics I’ve learnt over the years.
Trade Management and exit is the final lap of the approach and it’s also not less important than others…especially so for swing trading to be successful.
This is a brief summary of what I do.
Detailed explanation are being posted.
Next discussion will be on THE CYCLE
1 Like
MY SWING CYCLE
If you are familiar with the ‘M’ and ‘W’ patterns, then this will not be strange to you, but you’ll be adding more to what you know.
When price breaks a KSH/KSL,(that is, The trigger), we have our ‘XA’. This starts from the origin of the
move that broke the KSH/KSL. XA will always either be a True Break-out or a Failed Break-out. XA can never be a False Break-out nor a Range
XA…Failed Break-out
First confirmation given
Whatever entry I take here is not considered the safest 90/10 entry yet…except of course you are day trading…
For swing trading, you need to move into the the market when it’s of the highest probability (in your favour) that price is ready to move/trend.
Step 3 :
Step 3 : Change Of Character
Here, I need to see price change from a Bullish Orientation to a bearish orientation by taking out cito (Change in Trend Orientation ) point, then move a bit further down, then retrace and give an entry.
1 Like
Patiently waiting for your updates! Thank you for taking the time to make this post.