The H1 chart and its role:
Before I start taking trades on the M1 chart. I need to know what is the market doing as a whole. For that I would look at the D1 chart, have a quick wave analysis. But then drop to hourly chart. That’s where analysis begins.
What is the Trend on the Hourly Chart. Is it going up or down. Is it Wave 3 or 5? is it boxed tightly. The hourly chart may not trend on a daily basis. At times its in its respective 4th wave or it has no direction or trend. but at times, its slowly and clearly going towards an “identifiable” measured objective. i.e A TZ1 or a D1 Box high or Low.
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| DAX30 H1 Chart – Purple box indicate the boxed marked going sideways |
e.g. DAX H1 has been trending up during the last 2 days. But before we look at the last 2 days we have to talk about the 28th of march. That was the sideeways day. Gator was sleeping on h1. and purple was inside the box… totally sideways box.
The 29th of march brought some movement. and after the weekend, it started with a new month new orders new flare for life…
Although it went up and it continues to go up today, it did go through its “dead” period during the london open session. The market WAVE analysis is a powerful way to “understand” the structure and what is the structure of the structure of the structure ?
Now, WE know that eWave is one subjective yet at times quite measurable even objective structure of the market. The WAVE.
That structure has an underlying structure called the Fractal., the BOX, AIMS Box Indicator is the structure of the structure.
but the structure under all this is “ORDERS”
buy and sell orders. and volume of those orders.
When there are more/larger volume of BUY orders, the price starts to rise (in case of na index its the underlying stocks that moves because people are investing in those markets or divesting out of t hose markets).
so on the H1 chart, when we see the market is Trending up, i.e. Gator open to up side, the slope of the lines is up, 3 lines detached from each other, AO is creating a peak, histogram is green above ZL and box is stepping upwards. this means,
- the buy orders are exceeding the sell order and there is more demand in the market.
- this also means that the path of least resistance is up for this moment in time.
- and it means that on the lower time frames, there will be “bigger” up moves compared to down moves.
The London Session Today
The market opened with a spike up but that was soon killed by the sellers and market went back to where it broke from. Later the following happened.
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| the M5 chart complete noise |
So right now as I see the market, 3 hrs after the London Open, the Gator on M5 is open, price clearly going up. ONLY THEN do I trade this market in UP direction We were keen on trading the dax today but nothing was setting up. Soon the market boxed itself.
but I want this to happen within my 3 hrs of trading. from LO to 11am uk.
if it does not happen within that period, its fine. i’m ok with that. I’ll come back next day. and that is it. e.g. it happened within my trading time yesterday. The following picture shows where we trade the dax on m1. The Gator on M5 is Open, and M1 kept giving us buy signals. H1 was trending up (As a result of this)
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| Study this chart if you want to understand Fractal Geometry of the Markets |
- I want to know if market is Trending up or down on h1.
- I want to know if market is trending up or down on m5.
- I want to know if there is a setup in that direction on m1.
- and i want that within the First 15 min , then the first hr, then the first 2 hrs of the london session.
IF it starts to move, I will continue to trade it until i assess that nothing more is left in this market. or I’ve hit my loss or profit targets .
Do I look for 100% Clarity?
10 years of trading , to date , I have not found absolute clarity if I should take this trade or not, nor have I found absolute confidence about whether it’s going this way or that. But do know this,
THINK in terms of 20 TRADES. that’s all I know.
Embrace Uncertainty but Quantify It
I don’t know the result of this next trade, but I have a good idea of what might happen at the end of the next 20 Trades. [THIS IS A MILLION DOLLAR TRADING SECRET]
Don’t think why Steve or Sam is long or short. Think, where is my setup, and whether I should take it or not. its all about YOU.
IS THIS A SETUP? that’s my question.