[B] DECISION POINT[/B]
When you take a critical look at your chart daily, you will observe that it looks like massive fields where daily financial activities take place. In this massive field called Chart you are not supposed to use the entire field as your trading decisions points else you will be chasing shadows .Another example is the Football field, the players are restricted to the pitch alone not the full Stadium. In trading, map out an area for yourself and trade only the portion called Decision Point. If price hit the areas you mapped out, take your position but if price breakouts of the area wait until price retest it before you take any decision. Stop chasing price on the whole chart. I always tell traders that trading is not different from transportation system.
In any transport system there is a Bus (Price Movement), Bus-stops (Support, Resistance, Trendline and channel), Brake system in the Bus ( Candle patterns) and there is a Road (Trend) Now when the Bus move (price),the Bus will move in one direction and when it gets to a particular Bus stop identify with names (as we have Support, Resistance, Trendline and channel.) were you are waiting to board the Bus it will stop for you to enter(Entry point called Trigger) The Bus will continue(Candle Continuation Pattern) in that direction till it get to the end of the Road (Trend exhausted) and it will stop and reverse (Reversal candle pattern). If when you are at the Bus stop (Support, Resistance, Trendline and channel).Then the Bus did not stop for you to enter, will you run after the Bus to jump in?No. It can lead to death. The Bus Stop (Support, Resistance, Trendline and channel) are usually fixed therefore wait for the Bus to stop first before boarding. Now when the Bus stops, wait for the doors to be opened (candle Pattern) If the doors are not open (NO candle patterns) do not force it open) The chart below will give a clear understanding.
DECISION POINT.pdf (66.1 KB)